Suppose that a price index for a certain basket of goods and services has a value of 150 in 2015 and a value of 156 in 2016.This index suggests that the cost of the market basket of goods and services
A)was 4% higher in 2016 than in 2015.
B)was 6% lower in 2016 than in 2015.
C)was 6% higher in 2016 than in 2015.
D)was 156% higher in 2016 than in 2015.
E)was approximately the same in 2016 and 2015.

Question

Quizplus · Accepted Answer

The price index increased from 150 to 156, which is a 4% increase. The percentage increase is calculated as ((156 - 150) / 150) * 100 = 4%.

Suppose That a Price Index for a Certain Basket of Goods