PRC-2 · Chapter 9 · Question 58 of 60
What is a 'Value Index' designed to mathematically measure?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The relative change in total monetary expenditure or revenue, incorporating both price changes and quantity changes (p × q).
Explanation
A Value Index comprehensively measures changes in total expenditure, meaning it simultaneously evaluates the change in price mathematically multiplied by the change in quantity (∑pnqn / ∑p0q0).
More Indices MCQs
- Q60What is the primary economic and statistical purpose of calculating the Consumer Price Index (CPI)?
- Q1Which of the following best describes the fundamental purpose of constructing economic index numbers?
- Q2In the construction of an index number, the period against which all other periods are being compared is technically referred to as the:
- Q3Which standard mathematical formula is used to calculate a 'Simple Price Relative' for a single commodity?
- Q4In the Laspeyres Price Index formula, what specific values are used to weight the prices of the commodities?