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Which of the Following Statements Is Correct

Question 18

Short Answer

Which of the following statements is correct? A The Paasche price index is al ways equal to the Laspeyres price index during periods of inflation.BThe Laspeyres price index tends to underestimates price  increases during periods of inflation.C The Paasche price index tends to overestimates price  increases during periods of inflation.DThe Laspeyres price index tends to overestimate price increases during periods of inflation. \begin{array}{|l|l|}\hline A&\text { The Paasche price index is al ways equal to the Laspeyres}\\&\text { price index during periods of inflation.}\\\hline B&\text {The Laspeyres price index tends to underestimates price }\\&\text { increases during periods of inflation.}\\\hline C&\text { The Paasche price index tends to overestimates price }\\&\text { increases during periods of inflation.}\\\hline D&\text {The Laspeyres price index tends to overestimate price }\\&\text {increases during periods of inflation. }\\\hline \end{array}

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