state methods of selection of the base year
Answers
Answer:
What Is a Base Year?
A base year is the first of a series of years in an economic or financial index. It is typically set to an arbitrary level of 100. New, up-to-date base years are periodically introduced to keep data current in a particular index. Any year can serve as a base year, but analysts typically choose recent years.
Understanding Base Year
A base year is used for comparison in the measure of a business activity or economic index. For example, to find the rate of inflation between 2013 and 2018, 2013 is the base year or the first year in the time set. The base year can also describe the starting point from a point of growth or a baseline for calculating same-store sales.
Step-by-step explanation:
There are two methods for selecting the base period. One method is the selection of certain year as a base year. While the other is chain base method. Some times a normal year prices are neither too high nor too low as compared to the previous years.