Aconsumer price index of 160 in 1996 with a base year of 1982-1984 would mean that the cost of the market basket

a. rose 60% from the cost of the market basket in the base year.
b. equaled $160 in 1983.
c. equaled $160 in 1996.
d. rose 160% from the cost of the market basket in the base year.

A. rose 60% from the cost of the market basket in the base year.

Explanation:

The base year of 1982-1984 represents a 100 value for the index, and anything above it, is an over 100 value.

A 60% rise in 12 years (1984 to 1996) represents an average inflation rate of 5% every year, a bit high, but still within a moderate range.

The formula to find the adjusted consumer price index is:

Adjusted CPI = (CPIn / CPIb) - 1

Where:

CPIn = consumer price index in selected year (in this case 1996)

CPIb = consumer price index in base year (in this case 1982-1984)