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Up2
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 index
- The Paasche index
- The Fisher index
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Up1
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. -
Up1
Boo! I got it wrong. :neutral_face:
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