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CSS Statistics QUESTION #2010
Question 1
Laspeyres' price index uses quantities of the __________ period as weights, while Paasche's index uses quantities of the __________ period.
  • Current; base
  • Base; current✔️
  • Base; base
  • Current; current
Correct Answer Explanation
Laspeyres' index \(= \dfrac{\sum p_1 q_0}{\sum p_0 q_0} \times 100\) uses base period quantities \(q_0\) as fixed weights. Paasche's index \(= \dfrac{\sum p_1 q_1}{\sum p_0 q_1} \times 100\) uses current period quantities \(q_1\). Fisher's Ideal index is the geometric mean of both.