If 1999 is the base year and the inflation rate between 1999 and 2000 is - 12%, the price index in 2000 must be equal to:
A) 88.
B) - 120.
C) 120.
D) cannot be determined from this information because the base year is not known

Question

Quizplus · Accepted Answer

The base year index is always 100. A -12% inflation rate means the price index decreased by 12% from the base year, so the index in 2000 is 100 - 12 = 88.

If 1999 Is the Base Year and the Inflation Rate