If the Inflation Rate, as Measured by the CPI, Over

Multiple Choice

If the inflation rate, as measured by the CPI, over the past year was 5%, a basket of goods and services that cost _____ a year ago would be equivalent to _______ at the current price level.

A) $20,000, $20,500
B) $10,000, $11,000
C) $20,000, $21,000
D) $10,000, $10,800