Suppose that 1999 is the base year and the price index for 2008 is 130. A basket of goods that is valued $200 in 1999 would cost _______ in 2008.
A) $60
B) $30
C) $230
D) $260

Question

Quizplus · Accepted Answer

The price index of 130 indicates a 30% increase in prices since the base year. Therefore, a basket of goods that cost $200 in 1999 would cost $200 + (0.30 * $200) = $260 in 2008.

Suppose That 1999 Is the Base Year and the Price