Lecture 10 - Index Numbers Flashcards
1
Q
What is an Index Number?
A
A percentage that expresses a measurement in a given period in terms of the corresponding measurement for a selected base period.
2
Q
What are Index Numbers used for?
A
To deflate the effect of inflation on time series data, allowing the comparison of prices at different points in time.
3
Q
What is an aggregate price index used for?
A
Comparing baskets of goods.
4
Q
What is the limitation of unweighted price indexes?
A
The quantities purchased are not considered
5
Q
What is the Fisher price index?
A
The square root of the product of the Laspeyres and Passche indexes
