Suppose a Basket of Goods and Services Has Been Selected

Multiple Choice

Suppose a basket of goods and services has been selected to calculate the consumer price index.In 2005,the basket of goods cost $108.00;in 2006,it cost $135.00;and in 2007,it cost $168.75.Which of the following statements is correct?

A) Using 2005 as the base year,the economy's inflation rate was higher in 2007 than it was in 2006.
B) If 2007 is the base year,then the CPI is 33.75 in 2006.
C) If the CPI is 156.25 in 2007,then 2005 is the base year.
D) Using 2005 as the base year,the economy's inflation rate for 2006 was 27 percent.