The Price Index in the Base Year Always Equals_____

question 46

Multiple Choice

The price index in the base year always equals_____.

• A)0
• B)10
• C)100
• D)1
• E)0.01

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Definitions:

Loan

Money that is borrowed and should be returned with added interest.

Compounded Continuously

The process whereby interest is calculated on an initial principal and subsequently on the accumulated interest of previous periods, assuming the compounding occurs infinitely within a given time.

Effective Annual Rate

The actual interest rate an investment, loan, or savings account will yield after accounting for compounding.

Rate

The percentage or proportion of a specific quantity or value, often used in contexts like interest rates, return rates, or growth rates.