PRC-2 · Chapter 9 · Question 12 of 60
What does a Quantity Index measure?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The changes in the physical volume of goods produced, consumed, or distributed.
Explanation
While a price index measures changes in monetary cost, a quantity index is specifically designed to measure relative changes in the actual physical volume or number of items over time.
More Indices MCQs
- Q14A fundamental characteristic of the Laspeyres Index is that it tends to:
- Q15What is the primary formula representing a Value Index?
- Q16What is a defining characteristic of the Laspeyres price index regarding its denominator?
- 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?