Question

38. The ratio of a new price to the base year price in calculation of an Index number is
called the:
(A) Price relative
(B) Price absolute
(C) Price ratio
(D) Price comparative​

Answer 1

price ratio is the answer

Answer 2

The ratio of a new price to the base year price in calculation of an Index number is price relative.

• The relative price refers to the percentage ratio, chosen as a base, between the realistic value of the main variable in the current year and its value in the specific year.
• The relative price is the ratio of the price of a given commodity over one time to that of the same commodity over another time.
• Price relative is calculated as - P1/P0 x 100, where p0 is the base year price and p1 is the present year price.