The value of the consumer price index (CPI) is best described as the:
a. current year prices to base year prices, holding the market basket content constant.
b. current year prices to base year prices, including changes in the content of the market basket.
c. base year prices to current year prices, holding the market basket content constant.
d. base year prices to current year prices, including changes in the content of the market basket.
e. current year quantity to base year quantity, including changes in the prices of the market basket.

Option A.

Current year prices to base year prices, holding the market basket content constant

Explanation:

In simpler terms the Consumer price index a value used in measuring inflation in an economy. It  is a value that measures the weighted average of a basket of consumer goods and services such as food and transportation, healthcare etc. They are used to assess price changes associated with the cost of living in a particular society.

The formula for calculating The Consumer Price index is given as

CPI=  (Cost of Market Basket in Base Year / Cost of Market Basket in Given Year ) ×100

This makes the correct answer option A.

E) Current year quantity to base year quantity, including changes in the price of the market basket.

Explanation:

Consumer Price Index is an economic strategy which is used to check inflation. Consumer Price Index, also referred to ad C.P.I, is used to weigh the price level of the market basket which individuals purchase. When consumer price index is mentioned, thoughts usually go to price levels of goods and services and the changes it harbours. It is always necessary that a country checks its market for any sign of inflation and that is the use of the consumer price index. This checks for consumer purchase activity as well as the different price levels.

answer; the correct answer to the above statement is (true);