PRC-2 · Chapter 9 · Question 54 of 60
If the sum of prices for four raw materials in the base year was Rs. 80, and the sum of their prices in the current year is Rs. 100, what is the computed Simple Aggregate Price Index?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 125
Explanation
The simple aggregate method merely sums the unweighted current prices and divides by the sum of the base prices, multiplied by 100. Here, (100 / 80) * 100 = 125.
More Indices MCQs
- Q56Conversely, when formulating a Paasche *Quantity* Index, what data is exclusively used as the weighting factor?
- Q57What is an inherent statistical flaw of utilizing the 'Simple Aggregate Method' to construct a price index?
- 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)?