The base period is the
A)Time period used for comparative analysis.
B)Absence of significant changes in the average price level.
C)Time period when full employment is reached.
D)First year in which inflation figures were calculated.

Question

Quizplus · Accepted Answer

The base period is the time period used for comparative analysis. It is the reference period against which all other periods are compared for the purpose of measuring changes. It is usually chosen to represent a period of relatively stable economic conditions, with no significant changes in the average price level, so that any changes observed in subsequent periods can be attributed to economic forces rather than changes in the price level. The base period is not necessarily the first year in which inflation figures were calculated, nor is it necessarily the year in which full employment was reached.

The Base Period Is the