When preparing a price index based on multiple products,if the price of each product is weighted by the quantity of the product purchased in a given period of time,the resulting index is called ___________ price index.
A)Paasche
B)Weighted aggregate
C)Laspeyres
D)Cyclical (seasonal)

Question

Quizplus · Accepted Answer

A weighted aggregate price index is calculated by taking into account the relative importance of each product in the overall market basket, as determined by the quantity purchased. This approach is considered more accurate than a simple average price index, as it reflects changes in consumer behavior and preferences over time. The Paasche and Laspeyres price indices are two specific types of weighted aggregate price indices, each with their own method of weighting the products. A cyclical (seasonal) price index reflects the seasonal variations in prices of a specific product or group of products, and is not applicable for a generalized price index that covers multiple products.

When Preparing a Price Index Based on Multiple Products,if the Price