The Dorbish-Bowley price index is calculated as the:
Correct answer: B. Arithmetic mean of Laspeyres and Paasche price indices
- A. Geometric mean of price and quantity indices
- B. Arithmetic mean of Laspeyres and Paasche price indices
- C. Difference between current and base expenditures
- D. Ratio of current expenditure to base quantities
Explanation
The Dorbish-Bowley index takes the arithmetic mean of the Laspeyres and Paasche price indices. It differs from Fisher's index, which uses their geometric mean.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Index Numbers
Index numbers measure relative changes in prices, quantities or values over time using a base period. Work includes simple and weighted price indices, aggregate methods, consumer price calculations, percentage change and purchasing power, with attention to choosing a base year and interpreting an index rather than treating it as an absolute amount.
Practise Index Numbers
30 free Index Numbers MCQs from Quantitative Methods, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Quantitative Methods questions like this
Quantitative Methods is on this paper prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for it.
More Index Numbers questions
Fisher's price index is obtained by taking the:
In the construction of an index number, the value assigned to the base period is usually:
What does the time-reversal test require of a satisfactory price index?
Which statement describes a quantity index number?
If a price index increases from 100 to 128, the percentage increase in prices is:
A desirable technical property of an index number is that its value should not change merely because the units of measurement change. This property is called the: