Retail price index

Question 1

What is the Retail price index

Answer 1

• this is a comparison between price of the same every day goods, like milk and bread, from one to time to another.
• its used to measure inflation

Question 2

What is the base year (Retail price index)

Answer 2

A base year or starting point is chosen. This becomes the standard against which price changes are measured. its currently 1974

Question 3

How is the Retail price index used

Answer 3

• The difference in the index number( like the number of the currant year) compared to the base year shows the percentage difference between the two years.
• Therefore, if you were asked to interpret the data, you know that the index numbers show the percentage change (increase or decrease) from the base year after deducting 100.
• So, the price of the product in 2020 was 7% higher than it was in 2017.

Question 4

Indexes have a number of uses, including: (Retail price index)

Answer 4

• making numerical data easier to understand.
• measuring changes and simplify comparisons.
• showing changes over time in costs, prices, income and economic output data.
• shows the percentage difference between two years
• identify changes in prices
• used to help decide wages
• help a business make a financial plan