If the cost of the market basket in the base year is $1,000 and the cost of the market basket in 2013 is $1,080, the price index for 2013 is 80.

Question

Quizplus · Accepted Answer

The price index for 2013 can be calculated using the formula: (cost of market basket in the current year / cost of market basket in the base year) x 100.

Using the given information, we get: (1080/1000) x 100 = 108

Therefore, the price index for 2013 is 108, not 80.

If the Cost of the Market Basket in the Base