Question

1. If the CPI for 2008 was 112, the typical market basket purchased that year would cost
   1. 12% more than the same market basket purchased in the base year
   2. 112% more than the same market basket purchased the previous year
   3. 112% more than the same market basket purchased in the base year
   4. 12% more than the same market basket purchased the previous year

Answer 1

Answer : (A) 12% more than the same market basket purchased in the base year.

Explanation:: CPI indicates cost of market basket. CPI for base year is always 100. so if in 2008 CPI IS 112 then inflation in 2008 = 112-100/100*100= 12/100*100 = 0.12*100 = 12%.  

here inflation is 12% so it's means the cost for market basket is 12% more than same market basket in base year. also we should said that the CPI increased by 12% from base year to current year