Asked by Valerie Elisabette on Jun 29, 2024
Verified
If 2008 is the base year and the price index in 2009 is 109,prices in 2009 are _____ than prices in 2008.
A) 1 percent higher
B) 8 percent higher
C) 9 percent higher
D) 0.9 percent higher
E) 12 percent higher
Price Index
A statistical measure that examines the weighted average of prices of a basket of consumer goods and services, showing trends over time.
Base Year
A specific year against which economic, financial, or statistical data is standardized or indexed, allowing for comparison over time.
- Familiarize oneself with the concepts underlying nominal and real GDP, as well as the pivotal importance of base years in price index calculations.
Verified Answer
ZK
Zybrea KnightJul 03, 2024
Final Answer :
C
Explanation :
To calculate the percent change in prices from 2008 to 2009, we use the formula:
Percent change = ((New price index - Base price index) / Base price index) x 100
Plugging in the given values:
Percent change = ((109-100) / 100) x 100
Percent change = 9%
Therefore, prices in 2009 are 9% higher than prices in 2008. The correct answer is (C).
Percent change = ((New price index - Base price index) / Base price index) x 100
Plugging in the given values:
Percent change = ((109-100) / 100) x 100
Percent change = 9%
Therefore, prices in 2009 are 9% higher than prices in 2008. The correct answer is (C).
Learning Objectives
- Familiarize oneself with the concepts underlying nominal and real GDP, as well as the pivotal importance of base years in price index calculations.