The Laspeyres Price Index Has the Disadvantage That the Consumption

question 179

True/False

The Laspeyres price index has the disadvantage that the consumption pattern in the initial period might be quite different from that in the current period and,hence,does not reflect accurately the current consumption cost.

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Definitions:

Parameter

Numeric characteristic of a population.

Population

The entire aggregation of items or individuals from which samples can be drawn for statistical analysis.

Measure of Variability

A statistic that describes the degree to which scores in a distribution spread out or cluster together, such as range, variance, or standard deviation.

Statistic

A numerical measure that describes a characteristic of a sample derived from a larger population.