In Computing the Consumer Price Index,a Base Year Is Chosen

question 52

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)The base year is always the year in which the cost of the basket was highest among the years for which computations are being made.

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