PRC-2 · Chapter 9 · Question 30 of 60
Why do statisticians periodically engage in the practice of 'base shifting' when maintaining long-term index numbers?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) To transition the reference point to a more recent and economically relevant period.
Explanation
Over long stretches of time, consumer habits fundamentally change, making old base years obsolete. Base shifting manually resets the index to a more recent, relevant year to ensure ongoing accuracy.
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