In January, Herman bought 10 apples and 10 pears. In February, the price of apples increased and Herman only bought 8 apples. At the same time, pears became less expensive and Herman bought 12 pears. Which of the following inflation indices would be calculated assuming Herman always bought 8 apples and 12 pears?The Laspeyres indexThe Paasche indexThe Fisher index

The Laspeyres index is calculated based on the original basket of goods (10 apples and 10 pears). The Paasche index is calculated based on the new basket of goods (8 apples and 12 pears). The Fisher index is the geometric average of the two.

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- AdaptPrep
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  10 Oct 2018 at 7:15 am
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  The Laspeyres index is calculated based on the
  original basket of goods (10 apples and 10 pears).
  
  The Paasche index is calculated based on the new basket
  of goods (8 apples and 12 pears).
  
  The Fisher index is the geometric average of
  the two.
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