Asked by DANTE ANDERSON on Jun 05, 2024
Verified
If the price index is 100 this year,then:
A) there has been no inflation during the year.
B) the price level is thrice as it was in the base year.
C) the price level is one hundred times what it was in the base year.
D) the price level is double what it was in the base year.
E) the inflation rate has been 100 percent since the base year.
Price Index
A statistical measure that shows changes in the price level of a basket of consumer goods and services over a period of time.
Inflation Rate
The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.
- Gain an understanding of the distinctions between nominal and real GDP and the role of base years in calculating price indices.
Verified Answer
CD
Ciera DoranJun 11, 2024
Final Answer :
A
Explanation :
A price index of 100 indicates that the price level is the same as the base year, meaning there has been no change in the price level or inflation during the year.
Learning Objectives
- Gain an understanding of the distinctions between nominal and real GDP and the role of base years in calculating price indices.