PRC-2 · Chapter 9 · Question 20 of 60
If an inflation price index is calculated as 116 in the current year with a base year index of 100, what is the precise interpretation?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Prices have increased by an average of 16% since the base year.
Explanation
An index increase directly from 100 to 116 signifies mathematically that the average price of the tracked product or basket has increased by exactly 16%.
More Indices MCQs
- Q22Which statistical index number explicitly utilizes the current period's consumed quantities (q1) as its strict weighting factor?
- Q23When calculating a chained index, how is the link relative for a specific year manually determined?
- Q24In general index construction, what is the most significant disadvantage of using the Simple Aggregate Method?
- Q25If the calculated value of Fisher's Ideal Index is 144, and the Laspeyres index is 140, which formula structure is being utilized to…
- Q26A chain index series demonstrates annual sales index figures of 107.0, 115.02, and 123.07 for three consecutive years. What does this…