In 2001, in Calculation of the Implicit Price Index, Statistics

question 156

Multiple Choice

In 2001, in calculation of the implicit price index, Statistics Canada switched from fixed based price index method to a chain-weighted index.The main reason for this was:

• A)to avoid complex calculation of the fixed based price index.
• B)to better represent the weight of each category especially the information technology sector.
• C)to avoid underestimation of the GDP growth, due to the rapid growth in the information technology sector.
• D)to be able to use the relatively constant weights for the items in the GDP year after year.

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Definitions:

Exchange

Exchange signifies a platform or system where various entities trade commodities, securities, currency, and other instruments.

Future

A financial contract obligating the buyer to purchase, or the seller to sell, a particular asset at a predetermined future date and price.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a stated amount of an underlying security at a specified price within a specified time.

Sell An Asset

The act of disposing of a property or other investment in exchange for money or other assets.