The base year in the consumer price index (CPI) is:
A) given a value of zero.
B) a year chosen as a reference for prices in all other years.
C) always the first year in the current decade.
D) established by law.

Question

Quizplus · Accepted Answer

The base year in the CPI is a year chosen as a reference for prices in all other years. It is used to calculate the percentage change in price levels over time. For example, if the base year is 2010 and the CPI for 2015 is 120, that means prices have increased by 20% since 2010. The choice of the base year is arbitrary, but it is typically chosen as a year that represents a relatively stable period for prices.

The Base Year in the Consumer Price Index (CPI) Is