The price relative is a price index that is determined by
A) (Price in period t/Base period price)(100).
B) (Base period price/Price in period t)(100).
C) (Price in period t + Base period price)(100).
D) (Price in period t)(100).

Question

Quizplus · Accepted Answer

The formula for the price relative is (Price in period t/Base period price)(100). This formula determines the percentage change in price from the base period to period t. Multiplying the result by 100 gives the percentage increase or decrease in price relative to the base period price. Therefore, choice A is the correct answer.

The Price Relative Is a Price Index That Is Determined