The GDP price index compares the price (or cost) of goods and services that make up GDP in a specific year to the price of the same “m The given year's total price is divided by the base year's total price to arrive at the index figure. | b. of goods in a reference year. Price of Market Basket Price Index In Specific Year In Given Year x 100 Price of Same Basket In Base Year The index is expressed as a percentage, so if the base year's prices are higher than the given year, the index will be (_greater, less ) than 100. If the given year's prices are higher than the base year, the index will be ( more, less ) than 100. Because the numerator and denominator will be the same when the given year and base year are the same, the price index for the base year will always be
The GDP price index compares the price (or cost) of goods and services that make up GDP in a specific year to the price of the same “m The given year's total price is divided by the base year's total price to arrive at the index figure. | b. of goods in a reference year. Price of Market Basket Price Index In Specific Year In Given Year x 100 Price of Same Basket In Base Year The index is expressed as a percentage, so if the base year's prices are higher than the given year, the index will be (_greater, less ) than 100. If the given year's prices are higher than the base year, the index will be ( more, less ) than 100. Because the numerator and denominator will be the same when the given year and base year are the same, the price index for the base year will always be
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Measuring A Nation's Income
Section: Chapter Questions
Problem 6PA
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Transcribed Image Text:The GDP price index compares the price (or cost) of goods and services that make up GDP in a
specific year to the price of the same “m
The given year's total price is divided by the base year's total price to arrive at the index
figure. |
b
_" of goods in a reference year.
Price of Market Basket
Price Index
In Specific Year
In Given Year
х 100
Price of Same Basket
In Base Year
The index is expressed as a percentage, so if the base year's prices are higher than the given year, the
index will be ( greater, less ) than 100.
If the given year's prices are higher than the base year, the index will be ( more, less ) than 100.
Because the numerator and denominator will be the same when the given year and base year are the
same, the price index for the base year will always be
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