Moderate

The Laspeyres price index_____________?

Correct answer: A. Regards the base year quantities as fixed

  • A. Regards the base year quantities as fixed
  • B. Regards the base year price as fixed
  • C. Regards the current year quantities as fixed
  • D. non of these

Explanation

The Laspeyres index uses base-year quantities as weights while comparing prices between periods. It therefore keeps the consumption basket fixed at the base-year composition.

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