To measure consumer price index (CPI) which of the following years are taken into consideration?

(A) Current Year.
(B) Preceeding Year.
(C) Base Year.
(D) Succeeding Year.

Choose the correct answer from the options given below:

(A) and (C) only

The correct answer is Option (2) → (A) and (C) only

Consumer Price Index (CPI): This is the index of prices of a given basket of commodities which are bought by the representative consumer. CPI is generally expressed in percentage terms. We have two years under consideration – one is the base year, the other is the current year. We calculate the cost of purchase of a given basket of commodities in the base year. We also calculate the cost of purchase of the same basket in the current year. Then we express the latter as a percentage of the former. This gives us the Consumer Price Index of the current year vis-´a-vis the base year.