Question

3·The table below shows the market value of a given basket of goods from year 1 to year 5: Market value of basket $1.283.44 $1.411.78 $1.581.20 $1,723.51 $1.844.16 Price index Percentage 2-term MA Percentage change pf of price chg of 2-term MA Y ear rice index index 3 4 Complete the table (let year 2 be the base year)

Answer 1

Year	Market value of basket	Price Index	Percentage change of price index	2-term MA of price index	Percentage change of 2-term MA
1	1283.44	90.91
2	1411.78	100.00	10.0%	95.45
3	1581.2	112.00	12.0%	106.00	11%
4	1723.51	122.08	9.0%	117.04	10%
5	1844.16	130.63	7.0%	126.35	8%

Price index = ((Market basket value of Year 1)/ (Market basket value of Year 2))*100, divide other years by Market basket value of Year 2

Percentage change of price index = ((Price index year2-Price index year1)/Price index year1)*100 and so on

2-term MA of price index = average of (price index year 2, year 1),average of (price index year 3, year 2)

Percentage change of 2-term MA = ((106-95.45)/95.45)*100 and so on