In the base year the price index
A) will be between 1 and 100.
B) will always equal 100.
C) equals 100 times the cost of the market basket in the base year.
D) will equal the year.

Question

Quizplus · Accepted Answer

In the base year, the price index is always set to 100 by definition. The purpose of a price index is to measure changes in prices over time, and setting the base year index to 100 provides a consistent point of comparison for future years.

In the Base Year the Price Index