Suppose the price index for pizza for the year 2000 is 80?

Question

, this means the prices changed by how much between 2000 and the base year?

a. negative 80 percent
b. 20 percent
c. negative 20 percent
d. 80 percent

Answer 1

See my answer to your other question (see link).

By convetion, price indexes are scaled to equal 100 in the base year. To work out how much prices have risen between the base year and the specific year, calculate the percentage growth rate between the two years.

It was originally 100, but fell to 80 in 2000. What is the percentage change?

(80-100)/100 *100= -20

Therefore, the answer is C.

If you are still having trouble with these questions, explain what part of this you don't get and I will try and explain it to you. Once you understand how to do these problems they are very simple and you won't have access to the internet if you get asked one of these sort of questions in an exam.