Suppose the base year of the CPI is 2010, and the CPI calculated for 2012 was 102. What is the correct interpretation of this number?
A. Average prices in the economy have increased by 102 percent since 2010.
B. Average prices in the economy have increased by 4 percent since 2010.
C. The cost of living for a typical consumer is 2 percent higher than it was in 2010.
D. The average goods of consumers has risen an average of 2 percent from 2010 to 2012.
Answer: C
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