The price index in the current year is the cost of the market basket in the base year divided by the cost of the market basket in the current year.

Question

Quizplus · Accepted Answer

The formula for price index in the current year is actually the cost of the market basket in the current year divided by the cost of the market basket in the base year. This allows for comparisons of prices over time and is used in calculating inflation.

The Price Index in the Current Year Is the Cost