if the CPI for the year 2004 is calculated as 96.5. compared to the base year what can we say about the general price of goods and services at 2004
To understand what the Consumer Price Index (CPI) tells us about the general price of goods and services in a specific year, we can compare it to the base year.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The base year is typically set to 100.
In this case, if the CPI for the year 2004 is calculated as 96.5, it means that, on average, the prices of goods and services in 2004 were lower than the prices in the base year. Specifically, the prices were 96.5% of what they were in the base year.
So, in comparison to the base year, we can conclude that the general price of goods and services in 2004 was relatively lower. This could indicate a decrease in inflation or a decrease in prices for a significant portion of the market basket of goods and services used to calculate the CPI.