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21 May, 23:29

Assume that the current price of a market basket of goods is $2,500 and the base year price of the same market basket is $2,000. The current price index is

A. 2500.

B. 125.

C. 200.

D. 250.

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Answers (1)
  1. 22 May, 03:20
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    The correct answer is B.

    Explanation:

    Giving the following information:

    The current price of a market basket of goods is $2,500 and the base year price of the same market basket is $2,000.

    To calculate the price index we need to make a simple division:

    Price index = P1/P0

    PI = 2,500/2,000 = 1.25*100 = 125%
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