The base period used in computing a price index is
A)The year in which prices were at their lowest level.
B)The year in which prices were at their average level.
C)A fixed reference year from which meaningful comparisons can be made.
D)The earliest year for which data are available.

Question

Quizplus · Accepted Answer

The base period used in computing a price index is a fixed reference year from which meaningful comparisons can be made. This allows for consistent comparisons of prices over time, as prices in different periods can be compared relative to the prices in the base period. The other choices (A, B, and D) do not necessarily provide a meaningful basis for comparison.

The Base Period Used in Computing a Price Index Is