Question

Suppose 1992 is the base year and the market basket is worth $1,600 in 1992 and $1,840 in 1996. The values of this price index was in 1992 and in 1996.

(A) 90; 100
(B) 111; 100
(C) 100; 105
(D) 100; 110
(E) 100; 115

Answer 1

The price index for 1992 is 100, and the price index for 1996 is 115.

Correct option is E.

Step-by-step explanation:

To calculate the price index, we divide the value of the market basket in a given year by the value of the market basket in the base year and then multiply the result by 100.

In this case, the price index for 1992 would be (1600/1600) * 100 = 100.

The price index for 1996 would be (1840/1600) * 100 = 115.

Therefore, the correct answer is (E) 100; 115.