Chain-weighted indexes have less bias compared to fixed-weight indexes.

Chain-Weighted Indexes

Economic metrics that adjust the weighting of elements in an index to reflect changes in market or economic conditions over time.

Fixed-Weight Indexes

Economic measures where the quantities of the components are kept constant over time, allowing for the comparison of different periods based solely on price changes.

Understand the distinctions and uses of fixed-weight and chain-weighted price indices in the computation of inflation.

Verified Answer

Melissa GoldenMay 25, 2024

Final Answer :

True

Explanation :

Chain-weighted indexes adjust for changes in relative prices, which reduces bias compared to fixed-weight indexes that assume a constant basket of goods and services over time.

Learning Objectives

Understand the distinctions and uses of fixed-weight and chain-weighted price indices in the computation of inflation.

Chain-weighted indexes have less bias compared to fixed-weight indexes.

Definitions

Learning Objectives

Learning Objectives

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