Mathematics · Index Numbers
What is considered a primary practical disadvantage of using a Paasche Price Index instead of a Laspeyres Price Index?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It inherently overstates the impact of price increases because of fixed base quantities.
- 2It requires continuous, annual collection of current-year quantity data to recalculate the weights.✓
- 3It is completely unaccepted by all national and international accounting bodies.
- 4It completely ignores changes in commodity consumption quantities over time.
Correct answer
It requires continuous, annual collection of current-year quantity data to recalculate the weights.
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