If the price index for a particular year is 75, it implies that ________.
A) prices have increased by 7.5% over the base year
B) prices have increased by 0.75% over the base year
C) prices have decreased by 0.25% compared to the base year
D) prices have decreased by 25% compared to the base year

Question

Quizplus · Accepted Answer

A price index of 75 implies that the price level has decreased to 75% of the base year level, indicating a 25% decrease.

If the Price Index for a Particular Year Is 75