Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The average change over time in the prices paid by urban consumers for a market basket of consumer goods and services
B
The total income earned by individuals in a year
C
The total value of all goods and services produced in a country
D
The unemployment rate in a specific region
Understanding the Answer
Let's break down why this is correct
Answer
The Consumer Price Index (CPI) primarily measures the average change over time in the prices that consumers pay for a basket of goods and services. This basket includes things like food, clothing, housing, and transportation. By tracking how prices change, the CPI helps us understand inflation, which is when prices rise and money loses value. For example, if the CPI shows that prices have increased by 3% over a year, it means that what you could buy for $100 last year might cost $103 this year. This information is important for families, businesses, and policymakers to make informed financial decisions.
Detailed Explanation
The CPI tracks how prices change over time for things people buy, like food and clothes. Other options are incorrect because Some might think the CPI measures income; This option might confuse total production with prices.
Key Concepts
Consumer Price Index (CPI)
Topic
Understanding Consumer Price Index
Difficulty
easy level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.