Which of the following statements is TRUE about price-weighted indexes? I. The Laspeyres index uses base-period quantities as weights.
II) The Paasche index tends to underweight goods whose prices have gone down.
III) The Paasche index uses current-period quantities as weights.
A) I only
B) II only
C) I and III
D) II and III

Question

Quizplus · Accepted Answer

The Laspeyres index uses base-period quantities as weights, and the Paasche index uses current-period quantities as weights.

Which of the Following Statements Is TRUE About Price-Weighted Indexes