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discuss the weighted and unweighted index of prices.

 

3 to 4 mark question

Asked by fishtailfever 7th January 2020, 12:35 PM
Answered by Expert
Answer:
Weighted index of prices:
Weighted index number of prices includes weights in proportion to their prices depending upon importance.
These index numbers are certainly more realistic.
Formula for weighted index numbers is begin mathsize 16px style straight P subscript 01 equals fraction numerator sum for straight i of RW over denominator sum for straight i of straight W end fraction end style
Types of weighted index numbers are
1. Weighted Average of Price Relative Method
2. Weighted Aggregative Method
    a. Laspeyre's Method
begin mathsize 16px style straight P subscript 01 equals fraction numerator sum for straight i of straight p subscript 1 straight q subscript 0 over denominator sum for straight i of straight p subscript 0 straight q subscript 0 end fraction cross times 100 end style
    b. Paasche's Method
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c. Fisher's
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Unweighted Price Index numbers:
Unweighted index number of prices does not includes weights.
Its based on change in price purely.
Types of unweighted index numbers:
1. Simple Average 
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2. Simple aggregate
 
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Answered by Expert 8th January 2020, 4:04 PM
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