The base year is the year
A) in which prices are unstable.
B) in which prices are lowest.
C) in which prices are highest.
D) that serves as a reference point or benchmark.
E) in which nominal output is largest.

Question

Quizplus · Accepted Answer

The base year serves as a reference point or benchmark for comparing the economic activity and prices in other years. It is not necessarily the year with the lowest or highest prices or with the largest nominal output. Its purpose is to provide a consistent point of comparison to measure changes in the economy over time.

The Base Year Is the Year