Asked by megha ramani on May 16, 2024
Verified
A fixed-weight price index uses a process that adjusts the weights continuously year by year.
Fixed-Weight Price Index
An economic measure that calculates price changes over time, holding the quantity of goods and services constant to avoid the effect of substitution.
- Comprehend the differences and applications of fixed-weight and chain-weighted price indices in calculating inflation.
Verified Answer
CH
Chayna HouseMay 23, 2024
Final Answer :
False
Explanation :
A fixed-weight price index uses a fixed set of weights to determine the contribution of each item in a basket of goods and services to the overall index. The weights do not change year by year.
Learning Objectives
- Comprehend the differences and applications of fixed-weight and chain-weighted price indices in calculating inflation.
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