The consumer price index (CPI) is used to compute inflation.

Question 9 options:

True

False

The correct answer is True.

Explanation:

The CPI is the consumer price index. It is where the products that a family consumes regularly are valued and it is what is used to measure the inflation of a country.

Inflation is what causes the currency of a country to have a lower value, which produces an increase in the products that are consumed.

The inflation rate is measured by comparing the increase or decrease in the price of a product over a specific period of time, such as a year or a month.

Let's look at it with an example: if the rate of a product that costs $ 10 is 5% per year, next year that product will cost 5% more, that is, it will cost $ 10.50.

True

Explanation:

The CPI results from the variation of prices in a market basket compared between 2 years and the inflation is the measure of the change in CPI in a series of time.