PRC-2 · Chapter 9 · Question 45 of 60
If an official government price index rises from 100 in 2015 to 142 in 2024, what is the precise interpretation of this data?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Average prices of the goods in the index basket have increased by exactly 42% since 2015.
Explanation
Index numbers express relative changes as percentages compared to a base of 100. A shift to 142 mathematically indicates a 42% increase in the variable being tracked (in this case, prices).
More Indices MCQs
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- Q50What is a massive, practical advantage of utilizing a 'Chain Base Index' method rather than a Fixed Base Index?
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