PRC-2 · Chapter 9 · Question 37 of 60
When formulating a Paasche *Quantity* Index (rather than a price index), what data is utilized as the mathematical weighting factor?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Current year prices (pn)
Explanation
A quantity index tracks changes in physical volumes. Following Paasche's fundamental rule of using 'current' data for weights, a Paasche Quantity Index weights the volumes using current year prices (pn).
More Indices MCQs
- Q39Which of the following index calculation methods relies heavily on the use of sequential 'link relatives'?
- 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?