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JAMB Economics 2006 Question 2

Question 2

Money and Inflation

The price index is calculated as

  1. A.(base year price)/(current price) × 100/1
  2. B.(current price)/(base year price) × 100/1
  3. C.(weighted price)/(current price) × 100/1
  4. D.(current price)/(weighted price) × 100/1
Show the answer and explanation

Answer: B ((current price)/(base year price) × 100/1)

Explanation

A price index compares current prices with base-year prices: current price divided by base year price, times 100.