Multiple Choice
Which federal agency is responsible for calculating the Consumer Price Index (CPI) in the United States?
11. Gross Domestic Product (GDP) and Consumer Price Index (CPI)
Consumer Price Index (CPI)
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
The annual inflation rate measures the percentage growth rate of which of the following?
A
the nominal interest rate
B
the unemployment rate
C
the Consumer Price Index (CPI)
D
real GDP
Verified step by step guidance1
Understand that the annual inflation rate measures how much prices increase over a year, reflecting changes in the overall price level in the economy.
Recall that the Consumer Price Index (CPI) is an index that tracks the average price level of a basket of goods and services consumed by households.
Recognize that the inflation rate is calculated as the percentage change in the CPI from one year to the next, showing how much prices have risen.
Note that the nominal interest rate and unemployment rate are different economic indicators and are not directly used to measure inflation.
Conclude that the annual inflation rate specifically measures the percentage growth rate of the Consumer Price Index (CPI).
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