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A Price Relative Was Computed for Houses

Question 35

Multiple Choice

A price relative was computed for houses. The base period is 2005. The price relative in 2010 was 130. The interpretation of the price relative is that


A) there has been a 130% increase in the price of houses from 2005 to 2010.
B) there has been a 30% increase in the price of houses from 2005 to 2010.
C) the price of houses in 2010 was $130 higher than the price in 2005.
D) It is impossible to interpret the index.

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