The price of a certain farm product was $1.25 in the base period when the parity ratio was 100. If the index of prices paid by farmers is now at 140, then the parity price of this farm product today should be

Question

Quizplus · Accepted Answer

The parity price can be calculated by multiplying the base price by the current index of prices paid by farmers and then dividing by the base index (which is 100 in this case). So, the calculation is $1.25 * 140 / 100 = $1.75.

The Price of a Certain Farm Product Was $1