Suppose that a price index for a certain basket of goods and services has a value of 150 in 2009 and a value of 156 in 2010. This index suggests that the cost of the market basket of goods and services
A)was approximately the same in 2010 and 2009.
B)was 156 percent higher in 2010 than in 2009.
C)was four percent higher in 2010 than in 2009.
D)was six percent lower in 2010 than in 2009.
E)was six percent higher in 2010 than in 2009.

Question

Quizplus · Accepted Answer

The percentage change in the price index can be calculated as ((156-150)/150)*100 = 4%, therefore the cost of the market basket of goods and services was four percent higher in 2010 than in 2009.

Suppose That a Price Index for a Certain Basket of Goods