A simple aggregate price index_____________?
Correct answer: A. Ignores relative quantities
- A. Ignores relative quantities
- B. Compares relative quantities to relative prices
- C. Compares absolute prices to absolute quantities
- D. Compares relative quantities
Explanation
A simple aggregate price index is calculated from the sum of current prices divided by the sum of base-period prices, multiplied by 100. Since no quantities appear in this formula, it ignores relative quantities.
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