Which measure of central location is used to determine an average annual percent increase?
A)Arithmetic mean
B)Weighted mean
C)Mode
D)Geometric mean

Question

Quizplus · Accepted Answer

The geometric mean is the most appropriate measure of central location when we want to determine the average annual percent increase. This is because the geometric mean takes into account the compounding effect of returns over time, which is essential when calculating percentage changes. The arithmetic mean and weighted mean do not account for compounding effects and are better suited for averaging values that are not proportions or percentages. The mode has no relevance in this context.

Which Measure of Central Location Is Used to Determine an Average