Price index interpretation (base year 1960): If the current price index is approximately 330, what does this imply? Context: Treat 1960 as base = 100 and interpret the relative level of prices today. Choose the correct interpretation.

Given data

• Index number today: 330.
• Base year (1960) index: 100.

Concept / Approach A price index of 330 (base 100) means the average price level is 330/100 times the base.

Step-by-step calculation Relative level = 330 / 100 = 3.30. Percentage change from base = (330 − 100) / 100 × 100% = 230%.

Verification 3.30 times equals a 230% increase over the base (since 100% would be 2.00×, 200% would be 3.00×, and 230% is 3.30×).

Common pitfalls Confusing the index value (330) with the percentage increase (230%).

Final Answer Average prices are about 3.3 times the 1960 level, i.e., roughly a 230% rise.