If the Year 2000 Is Used as a Base Year

question 20

True/False

If the year 2000 is used as a base year and the value of the price index in 2001 is 105, it implies that there was a 5% increase in the price level in 2001.

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Definitions:

Debits

In accounting, debits are entries on the left side of an account ledger, indicating increases in asset or expense accounts, or decreases in liability, equity, or revenue accounts.

Credit

An accounting entry that represents an increase in liabilities or equity or a decrease in assets, opposite of a debit.

Offset Side

The side of a transaction that counterbalances the primary entry, ensuring the accounting equation remains balanced.

Increase Side

The side of an account on which increases are recorded, depending on the type of account it could be the debit or credit side.