(27.2)
The first term of (27.2) contains a small (negative) multiplier of B on itself. In full employment, u
0.02, and with RIR
0.30 the multiplier might easily be neglected. That is, neglected in (27.2) but not for the determination of the RIR in the base year - since B u cannot be neglected for the base of the RIR. Since (27.1) and (27.2) are mathematically the same, using (27.1) makes that the question of neglecting that small multiplier does not arise.
Another point is that the index becomes simpler if all price indices are the same. Taking P = Pi gives RIR
