PRC-2 · Chapter 9 · Question 56 of 60
Conversely, when formulating a Paasche *Quantity* Index, what data is exclusively used as the weighting factor?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Current year prices (pn)
Explanation
Following Paasche's fundamental rule of using 'current' data for weights, a Paasche Quantity Index tracks changing volumes by weighting them against current year prices (pn).
More Indices MCQs
- Q58What is a 'Value Index' designed to mathematically measure?
- Q59When maintaining a long-term index series, what is the statistical process known as 'base shifting'?
- Q60What is the primary economic and statistical purpose of calculating the Consumer Price Index (CPI)?
- Q1Which of the following best describes the fundamental purpose of constructing economic index numbers?
- Q2In the construction of an index number, the period against which all other periods are being compared is technically referred to as the: