An index for 2018 is 120 and an index for 2020 is 150, both with 2015 as the base year. What is the 2020 index with 2018 as the base year?
Correct answer: B. 125.00
- A. 120.00
- B. 125.00
- C. 130.00
- D. 135.00
Explanation
To shift the base to 2018, divide the 2020 index by the 2018 index and multiply by 100: 150 ÷ 120 × 100 = 125. The rebased index therefore shows a 25 percent rise from 2018 to 2020.
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About Index Numbers
Index numbers measure relative changes in prices, quantities or values over time using a base period. Work includes simple and weighted price indices, aggregate methods, consumer price calculations, percentage change and purchasing power, with attention to choosing a base year and interpreting an index rather than treating it as an absolute amount.
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