Question 22 The consumer price index (CPI) is designed to measure (1) the impact of price changes on the value of real GDP. (2) the impact of price changes on the cost of the typical bundle of goods purchas (3) the total spending of households as a percentage of GDP. (4) the nominal value of consumer spending on food, clothing, and energy.

The **Consumer Price Index (CPI)** is a statistical measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is primarily used to assess price changes associated with the cost of living. **Analyzing the Options:** 1. **Impact on Real GDP:** - The CPI does not directly measure the impact on real GDP. Real GDP adjusts for inflation, but CPI itself is a measure of inflation. 2. **Impact on the Cost of the Typical Bundle of Goods Purchased:** - **Correct.** CPI specifically measures how the prices of a typical basket of consumer goods and services change over time, reflecting the cost of living. 3. **Total Spending of Households as a Percentage of GDP:** - The CPI does not measure household spending as a percentage of GDP. 4. **Nominal Value of Consumer Spending on Food, Clothing, and Energy:** - While CPI includes these categories, it measures price changes, not the nominal value of spending. **Answer:** **Option (2)** — the impact of price changes on the cost of the typical bundle of goods purchased