The price index in the base year is normalized so that it equals 100 in the base year.

Name: The price index in the base year is normalized so that it equals 100 in the base year.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This statement is true. The price index is calculated by dividing the cost of a basket of goods in the current year by the cost of the same basket of goods in the base year and multiplying by 100. In the base year, the cost of the basket of goods is the same as the cost in the current year, so the price index is 100.

The Price Index in the Base Year Is Normalized So