Suppose a basket of goods and services has been selected to calculate the cpi and 2012 has been chosen as the base year. in 2012, the basket's cost was $80.00; in 2013, the basket's cost was $84; and in 2014, the basket's cost was $87.60. the value of the cpi was a. 100 in 2012. b. 105 in 2013c. 109.5 in 2014 d. all of the above are correct

d. All of the above are correct

Explanation:

Since 2012 is the base year, the CPI index in 2012 is 100

Cost of basket of good in 2012 = $80

Cost of basket of good in 2013 = $84

Cost of basket of good in 2014 = $87.6

Change in inflation in 2013 as compared to 2012 = ((84 - 80)/80)*100

                                                                                  = 5%

index in 2013 = 100 + (100*5%)

                       = 105

Change in inflation in 2014 as compared to 2013 = ((87.6 - 84)/84 )* 100 = 4.3%

index in 2014 = 105 + (105*4.3%)

                       = 109.5

Therefore, The value of the CPI was 100 in 2012, 105 in 2013 and 109.5 in 2014

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