A Paasche price index makes price changes seem better for the consumer than they really are.

Name: A Paasche price index makes price changes seem better for the consumer than they really are.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The Paasche price index uses a fixed basket of goods and services to compare prices at different times. It tends to over-emphasize changes in the prices of items that consumers buy less of, rather than those they buy more of, making price changes appear less significant for consumers than they actually are.

A Paasche Price Index Makes Price Changes Seem Better for the Consumer