A ratio of the price of a representative basket of goods and services in some year relative to an arbitrary base year is
A) the rate of unemployment.
B) the rate of inflation.
C) a price index.
D) an index of real wages.
E) a measure of the rate of growth of labor productivity.

Question

Quizplus · Accepted Answer

A price index measures the average change in prices over time of a basket of goods and services. It is calculated by comparing the price of this basket in a given year to its price in a base year.

A Ratio of the Price of a Representative Basket of Goods