A price index shows
A) the current cost of a basket of goods.
B) the relative price of necessities.
C) the price of goods in the future.
D) the cost of today's goods expressed in terms of the cost of goods in a base year.

Question

Quizplus · Accepted Answer

A price index measures the price changes of a basket of goods over time. It is calculated by comparing the current cost of that basket of goods to its cost in a base year. A price index shows the cost of today's goods expressed in terms of the cost of goods in a base year. Therefore, the correct answer is D.

A Price Index Shows