In the construction of an index number, the value assigned to the base period is usually:
Correct answer: D. 100
- A. 0
- B. 1
- C. 10
- D. 100
Explanation
The base period is conventionally assigned an index value of 100. Other periods are then expressed as percentages of the base period, so an index of 120 means a 20 percent increase over the base.
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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.
Practise Index Numbers
30 free Index Numbers MCQs from Quantitative Methods, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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