PRC-2 · Chapter 9 · Question 18 of 60
Which of the following statements accurately describes a chain index series?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Each new value in the index is calculated based on the immediate previous year.
Explanation
A chain index series is an index where each new sequential value is mathematically calculated based on the previous year rather than being tied to a single fixed base.
More Indices MCQs
- Q20If an inflation price index is calculated as 116 in the current year with a base year index of 100, what is the precise interpretation?
- Q21A commodity's price was Rs. 4,500 in the base year 20X8 and rose to Rs. 5,400 in 20Y0. What is the simple price relative index for 20Y0?
- Q22Which statistical index number explicitly utilizes the current period's consumed quantities (q1) as its strict weighting factor?
- Q23When calculating a chained index, how is the link relative for a specific year manually determined?
- Q24In general index construction, what is the most significant disadvantage of using the Simple Aggregate Method?