Question

the base year index of a selected variable is assumed as​

Answer 1

Explanation:

• The base year index of a selected variable is assumed as 100. The index numbers are measured for the current year on the basis of the past year.

Answer 2

The base year index of a selected variable is the index value assigned to that variable in a chosen base year. In other words, the base year index is used as a reference point to measure the change in the value of the variable over time.

For example, let's say we are interested in measuring the inflation rate of a country. We can use the consumer price index (CPI) as a measure of inflation, and select a base year (e.g., 2020) as the reference point for the index. In the base year, the CPI would be assigned a value of 100. This means that the CPI in subsequent years will be measured relative to the base year index value of 100.

If the CPI in the following year is 110, this indicates that prices have increased by 10% compared to the base year. Similarly, if the CPI in the year after that is 120, this indicates that prices have increased by 20% compared to the base year.

The choice of base year is important because it affects the interpretation of the index values over time. Different base years can lead to different index values and different interpretations of trends in the variable of interest. Therefore, it is important to choose a base year that is representative of the period being studied and that allows for meaningful comparisons over time.

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