Question

If the cost of a market basket is $200 in 2016 and $230 in 2017, the price index for 2017 using 2016 as the base year is _____.

A) 110
B) 115
C) 120
D) 125

Answer 1

The price index for 2017 using 2016 as the base year is 115.

Step-by-step explanation:

To calculate the price index for 2017 using 2016 as the base year, you need to divide the cost of the market basket in 2017 by the cost of the market basket in 2016, and then multiply the result by 100. In this case, the cost of the market basket in 2017 is $230 and the cost of the market basket in 2016 is $200. So the price index for 2017 is (230/200) * 100 = 115.