In Computing the Consumer Price Index, a Base Year Is

question 36

Multiple Choice

In computing the consumer price index, a base year is chosen. Which of the following statements about the base year is correct?

• A) The base year is always the first year among the years for which computations are being made.
• B) It is necessary to designate a base year only in the simplest case of two goods; in more realistic cases, it is not necessary to designate a base year.
• C) The value of the consumer price index is always 100 in the base year.
• D) All of the above are correct.

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