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The Paasche price index makes things look better than they are because: (a) it under-estimates current year prices (b) it implicitly assumes that preferences are

The Paasche price index makes things look better than they are because: (a) it under-estimates current year prices (b) it implicitly assumes that preferences are homothetic (c) it uses the wrong base year (d) it implicitly assumes that indifference curves are L-shaped (e) it over-estimates current year quantities

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Recommended Textbook for

Price theory and applications

Authors: Steven E landsburg

8th edition

538746459, 1133008321, 780538746458, 9781133008323, 978-0538746458

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