PRC-2 · Chapter 9 · Question 15 of 60
What is the primary formula representing a Value Index?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Sum(p1 * q1) / Sum(p0 * q0) * 100
Explanation
A Value index measures the total combined change in both price and quantity. The formula takes the total current value (p1 * q1) divided by the total base value (p0 * q0), multiplied by 100.
More Indices MCQs
- Q17Why is the Laspeyres price index typically used more frequently in practical economic applications than the Paasche price index?
- Q18Which of the following statements accurately describes a chain index series?
- Q19The Consumer Price Index (CPI) is fundamentally designed to mathematically measure:
- 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?