In the context of the cost of living index, what does it indicate if a city's index is above 100?

• A. The city is more expensive to live in compared to the base city.
• B. The city is less expensive to live in compared to the base city.
• C. The city has the same cost of living as the base city.
• D. The city has a higher population than the base city.

Answer: (A)

Verified step by step guidance

1. Understand that a cost of living index compares the cost of goods and services in one city to a base city, which is assigned an index value of 100.
2. Recognize that if a city's cost of living index is exactly 100, it means the cost of living in that city is the same as the base city.
3. Interpret an index above 100 as indicating that the city is more expensive to live in compared to the base city, meaning goods and services cost more on average.
4. Conversely, an index below 100 would indicate that the city is less expensive to live in compared to the base city.
5. Note that the cost of living index does not provide information about population size, only relative expenses.