CPI Allows Offsetting Price Changes for Stability

Steps:

• CPI calculates a weighted average of price changes for a basket of goods.
• Price stability means the overall CPI index remains unchanged, so net price change is zero.
• Individual prices can rise or fall, but weighted increases must balance decreases.
• Evaluate options: stability doesn't require uniform prices, just balanced net effect.

Why D is correct:

• CPI formula is a weighted sum of price relatives; stability occurs when rises and falls offset exactly, per the Laspeyres index method.

Why the others are wrong:

• A: Offsets allow some prices to change without altering CPI.
• B: Matching numbers ignores weights and varying magnitudes of changes.
• C: Standard CPI uses fixed weights; varying them creates a different index, not stability in the given CPI.

Final answer: D