For an index number of an average quantity or price, the weights used must add up to 1 for
A)neither a proportional- weights index nor an unweighted index.
B)price indexes only.
C)a proportional- weights index but not an unweighted index.
D)an unweighted index but not a proportional- weights index.
E)both a proportional- weights index and an unweighted index.

Question

Quizplus · Accepted Answer

Both a proportional-weights index and an unweighted index require the weights to add up to 1. In a proportional-weights index, the weights represent the proportion of total expenditures for each item. In an unweighted index, each item is given equal weight, but the weights still need to add up to 1 in order to calculate the average.

For an Index Number of an Average Quantity or Price