Question
The Laspeyres, Paasche, and Chain-Weighted Indices are three ways of calculating GDP over time. Which of the following is true about the three methods best?
The Laspeyres, Paasche, and Chain-Weighted Indices are three ways of calculating GDP over time. Which of the following is true about the three methods best?
a. The Laspeyres and Paasche Index both depend on the chain-weighting process.
b. The method of computing the change in real GDP with the initial prices is called the Laspeyres index, while the method that uses the final prices is called the Paasche index.
c. The method of computing the change in real GDP with the final prices is called the Laspeyres index, while the method that uses the initial prices is called the Paasche index.
d. The Laspeyres and Paasche Index both involve taking the geometric average of the "gross" percentage changes
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