The Following Are the Two CPI Series (One for 1985-1989$$\text { Consumer price index with different base periods, Australia }$$

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The Answer is To construct the new series for the years 1985-1992 with 1990 = 100, we first determine an overlapping year of the two series. Here we can use 1989 for this purpose.
From the two CPI series, for the overlapping year 1989,
CPI₁₉₈₉
=
202.3 (base year 1980 = 100)
=
95.0 (base year 1990 = 100).
Therefore, for the year 1988:
CPI₁₉₈₈
=
187.3 (base year 1980 = 100)
=
187.3 *(95/202.3) (base year 1990 =100)
=
87.96 (base year 1990 = 100).
Similarly:
CPI₁₉₈₇
=
174.5 (base year 1980 = 100)
=
174.5* (95/202.3) (base year 1990 = 100)
=
81.95 (base year 1990 = 100).
That is, to convert the entries with base year 1980 = 100 for the years 1985 to 1988 into entries with base year 1990 = 100, we multiply each entry by the ratio 95.0/202.3 = .4696. The resulting series is shown in the last column of the following table:

\begin{array}{l}\text { Consumer Price Index, 1985-92 }\\begin{array} { | c | c | c | c | } \hline \text { Year } & \begin{array} { c } \text { Base year } \( 1980 = 100 )\end{array} & \begin{array} { c } \text { Base year } \( \mathbf { 1 9 9 0 } = \mathbf { 1 0 0 } )\end{array} & \begin{array} { c } \text { New series base year } \( 1990 = 100 )\end{array} \\hline 1985 & 148.7 & & 69.8 \\hline 1986 & 162.6 & & 76.4 \\hline 1987 & 174.5 & & 81.9 \\hline 1988 & 187.3 & & 88.0 \\hline 1989 & 202.3 & 95.0 & 95.0 \\hline 1990 & & 100.0 & 100.0 \\hline 1991 & & 105.3 & 105.3 \\hline 1992 & & 107.3 & 107.3 \\hline\end{array}\end{array}

The Following Are the Two CPI Series (One for 1985-1989 $\text { Consumer price index with different base periods, Australia }$

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The Following Are the Two CPI Series (One for 1985-1989 Consumer price index with different base periods, Australia \text { Consumer price index with different base periods, Australia } Consumer price index with different base periods, Australia

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The Following Are the Two CPI Series (One for 1985-1989 $\text { Consumer price index with different base periods, Australia }$

Correct Answer:
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