A CPI that equals 1.34 in 2005 (when 2000 is the base year) means that:?

Question

21. A CPI that equals 1.34 in 2005 (when 2000 is the base year) means that:

A. prices in 2005 are 34 percent higher than in 2004.

B. the CPI equals $1.34 in 2005.

C. the inflation rate in 2005 is 134 percent.

D. the average level of prices is 34 percent higher in 2005 than in the base year.

E. the inflation rate in 2005 is 1.34 percent.

Answer 1

D. the average level of prices is 34 percent higher in 2005 than in the base year.