A CPI That Equals 1

Multiple Choice

A CPI that equals 1.34 in 2008 (when 2000 is the base year) means that:

A) prices in 2008 are 34 percent higher than in 2007.
B) the CPI equals $1.34 in 2008.
C) the inflation rate in 2008 is 134 percent.
D) the average level of prices is 34 percent higher in 2008 than in the base year.