Unit 2

Question 1

Define base period.

Answer 1

Base period is the period, such as a year or month, with which all other values are compared.

Question 2

What is an index number?

Answer 2

An index number is an indicator showing the relative value of one number to another from a base of 100. It is often used to present an average of a number of statistics.

Question 3

What is a nominal value?

Answer 3

A nominal value is value unadjusted for the effects of inflation (i.e. values at current prices).

Question 4

What is a real value?

Answer 4

A real value is a value that is adjusted for inflation (i.e. values at constant prices).