An increase in the CPI usually signals which of the following?

Question

A) that the economy is shrinking
B) that the economy is growing
C) that the economy is stagnant
D) that the economy is in recession

Answer 1

B) that the economy is growing

An increase in the Consumer Price Index (CPI) often indicates that the economy is experiencing inflation, which can occur in a growing economy as demand for goods and services increases. However, it's important to note that while CPI can signal growth, it can also indicate potential overheating in the economy, depending on the context.