What is the Consumer Price Index?

• A. A measure of the total quantity of goods and services produced in an economy over a period (a measure of real GDP).
• B. A measure of the growth rate of the money supply (such as M1 or M2) used to control inflation.
• C. An index measuring the average change over time in the prices paid by consumers for a fixed market basket of goods and services.
• D. An index that tracks the average prices received by producers for goods at the wholesale level (the Producer Price Index).

Answer: (C)