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AP® Macroeconomics

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Price Index Formula

APMACR-AT4GXG

Which of the following formulas best defines the formula used to calculate a Price Index number?

A

Price of market basket year divided by highest marginal tax rate.

B

Price of market basket in a specific year divided by the price of same market basket in base year times 100.

C

Price of market basket divided by price of most expensive good from the basket multiplied by 100.

D

Price of basket in base year divided by price of basket in a specific year times 100.

E

Price index for specific year divided by 100.