The Price of a Basket of Goods in 2000 Was

Multiple Choice

The price of a basket of goods in 2000 was $500. If the same basket cost $600 in 2002, identify the correct statement from the following.

A) The price index in 2002 must have been 100 points higher than in 2000.
B) The price increase between 2000 and 2002 was 10%.
C) If 2000 is considered the base year, then the price index in 2002 must have been 120.
D) If 2002 is considered the base year, then the price index in 2000 must have been 70.