PRC-2 · Chapter 9 · Question 38 of 60
Conversely, what does the Laspeyres *Quantity* Index exclusively use as its weighting factor?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Base year prices (p0)
Explanation
Laspeyres always relies on historical, base-period data for weighting. Therefore, a Laspeyres Quantity index will weight the shifting volumes using the fixed base year prices (p0).
More Indices MCQs
- Q40What is a 'Value Index' designed to mathematically measure?
- Q41When selecting a 'base year' for a price index, statisticians generally aim to pick a year that is:
- Q42What is considered a massive, practical advantage of utilizing a Chained Index over a Fixed Base Index?
- Q43What is the formula to manually calculate a 'Simple Price Relative' for a single commodity?
- Q44In the standard mathematical notation for index construction, what does the expression 'pn * q0' explicitly dictate?