What is the index value of the base period?

What is the index value of the base period?

• A. 50
• B. 100
• C. 200
• D. 150

Answer: (B)

The index value of the base period is always set at 100. This is a standard convention in index number calculations, allowing for easy comparison of data over different periods. Setting the base period at 100 means that subsequent periods can be expressed as a percentage of that base. For example, if the index value in a subsequent period is 150, it indicates a 50% increase compared to the base period. If it were 200, that would signify a 100% increase, and values below 100 indicate a decrease relative to the base. By using 100 as the index for the base period, it provides a clear, standardized reference point for evaluating changes in data over time.

The index value of the base period is always set at 100. This is a standard convention in index number calculations, allowing for easy comparison of data over different periods. Setting the base period at 100 means that subsequent periods can be expressed as a percentage of that base.

For example, if the index value in a subsequent period is 150, it indicates a 50% increase compared to the base period. If it were 200, that would signify a 100% increase, and values below 100 indicate a decrease relative to the base. By using 100 as the index for the base period, it provides a clear, standardized reference point for evaluating changes in data over time.