If the cost of the market basket in the base year is $5,000 and the cost of the market basket in the current year is $5,100, the price index for the current year is 102.

Question

Quizplus · Accepted Answer

To calculate the price index, we use the formula: 
Price index = (cost of market basket in current year / cost of market basket in base year) x 100%

Plugging in the given numbers, 
Price index = (5100/5000) x 100% = 102

Therefore, the statement is true.

If the Cost of the Market Basket in the Base