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

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.

Boo! I got it wrong. :neutral_face:

Question Of The Week - Economics (10) - CFA Level 1

Add A Reply

This topic has 2 replies, 2 voices, and was last updated Jan-186:46 pm by shannondaily.

Author

Posts
- AdaptPrep
  Participant
  - Undecided
  05 Nov 2017 at 10:03 pm
  Up
  1
  ::
  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.
- shannondaily
  Participant
  - Undecided
  25 Jan 2018 at 6:46 pm
  Up
  1
  ::
  Boo! I got it wrong. :neutral_face:
Author

Posts

Viewing 1 reply thread

You must be logged in to reply to this topic.