Asked by Charol Pelagio on Jun 29, 2024
Verified
A chain-weighted index recognizes the fact that the composition of output changes over time.
Chain-Weighted Index
An inflation measure that updates the weights of goods and services periodically to better reflect changing spending patterns.
Output Changes
Variations in the level of production of goods and services in an economy over a specific period.
- Acknowledge the variances and applications between fixed-weight and chain-weighted price indices in inflation calculation.
Verified Answer
SC
Sydoney ClarkeJun 29, 2024
Final Answer :
True
Explanation :
A chain-weighted index is designed to adjust for changes in the composition of output over time, recognizing that different goods and services may grow or decline at different rates. This type of index is considered a more accurate measure of inflation or economic growth compared to fixed-weighted indexes, which assume a fixed basket of goods and services over time.
Learning Objectives
- Acknowledge the variances and applications between fixed-weight and chain-weighted price indices in inflation calculation.
Related questions
Chain-Weighted Indexes Have Less Bias Compared to Fixed-Weight Indexes
A Fixed-Weight Price Index Uses a Process That Adjusts the ...
Because the Consumer Price Index Reflects the Goods and Services ...
The Consumer Price Index Is Used to Monitor Changes in ...
The Consumer Price Index (CPI)is a Measure of The: ...