If the cost of housing increases by 10 percent, then, other things the same, the CPI is likely to increase by а bout: (A) 10 percent. (B) 8.5 percent. (C) 6 percent. (D) 4 percent.

Question

Business

Cadence Vega

27 January, 02:21

If the cost of housing increases by 10 percent, then, other things the same, the CPI is likely to increase by а bout: (A) 10 percent. (B) 8.5 percent. (C) 6 percent. (D) 4 percent.

+3

Answers (1)

Know the Answer?

Gilberto Baird · Answer 1

correct option is (D) 4 percent

Explanation:

given data

cost of housing increases = 10 percent

to find out

CPI is likely to increase by

solution

as other thing (CPI) Consume price index is likely to increase as

(CPI) Increase in Consume price index = 40 % of cost of housing increases ... 1

so (CPI) Increase in Consume price index = 40 % of 10%

Increase in Consume price index = 4%

so correct option is (D) 4 percent