Which statement describes a quantity index number?
Correct answer: A. It measures changes in physical quantities
- A. It measures changes in physical quantities
- B. It measures changes in commodity prices
- C. It measures changes in total expenditure
- D. It measures changes in purchasing power
Explanation
A quantity index measures changes in the physical volume of goods or services, such as production or consumption. A price index focuses on prices, while a value index combines price and quantity changes.
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The Dorbish-Bowley price index is calculated as the:
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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:
The factor reversal test for index numbers requires that the product of the price index and quantity index equal the: