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CELPIP Practice · Question

A news report details a significant increase in Canada's Consumer Price Index (CPI) over the past quarter. What does this generally indicate for the average Canadian household?

A significant increase in the CPI is a primary indicator of inflation, meaning that the cost of living—the prices of goods and services—is rising for consumers.

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Question: A news report details a significant increase in Canada's Consumer Price Index (CPI) over the past quarter. What does this generally indicate for the average Canadian household?

Answer options:

  • A decrease in the overall cost of goods and services.
  • An increase in the purchasing power of their money. ✅ That prices for everyday goods and services are rising, signifying inflation.
  • A boost in interest rates on their bank accounts only.

Correct answer: That prices for everyday goods and services are rising, signifying inflation.

Explanation: A significant increase in the CPI is a primary indicator of inflation, meaning that the cost of living—the prices of goods and services—is rising for consumers. This is a common economic topic in news items that affects daily life.

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