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With regard to Laspeyre’s and Paasche’s price index number, it is maintained that “If the prices of all the goods change in the same ratio, the two indices will be equal for them the weighting system is irrelevant; or if the quantities of all the goods change in the same ratio, they will be equal, for them the two weighting systems are the same relatively”.Then the above statements satisfy.
  • a)
    Laspeyre’s Price index ≠ Paasche’s Price Index. 
  • b)
    Laspeyre’s Price Index = Paasche’s Price Index.
  • c)
    Laspeyre’s Price Index may be equal Price Index.
  • d)
    None of these.
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
With regard to Laspeyre’s and Paasche’s price index number...
Explanation:

Laspeyres and Paasches price index numbers are two different methods used to calculate the price index number of a set of goods. The Laspeyres price index number is calculated using fixed weights, while the Paasches price index number uses variable weights.

The given statement states that if the prices of all the goods change in the same ratio, the two indices will be equal for them the weighting system is irrelevant; or if the quantities of all the goods change in the same ratio, they will be equal, for them the two weighting systems are the same relatively.

This statement implies that if there is a proportional change in either the prices or the quantities of all the goods, the two indices will be equal. In other words, if there is a uniform change in either price or quantity, the two indices will be the same.

Hence, the correct answer is option 'B', which states that Laspeyres Price Index = Paasches Price Index. This is because if the prices or quantities of all goods change in the same proportion, the two indices will be equal.

Overall, the statement emphasizes that the weighting system used in the two indices is irrelevant if there is a uniform change in prices or quantities of all goods.
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With regard to Laspeyre’s and Paasche’s price index number, it is maintained that “If the prices of all the goods change in the same ratio, the two indices will be equal for them the weighting system is irrelevant; or if the quantities of all the goods change in the same ratio, they will be equal, for them the two weighting systems are the same relatively”.Then the above statements satisfy.a)Laspeyre’s Price index ≠ Paasche’s Price Index.b)Laspeyre’s Price Index = Paasche’s Price Index.c)Laspeyre’s Price Index may be equal Price Index.d)None of these.Correct answer is option 'B'. Can you explain this answer?
Question Description
With regard to Laspeyre’s and Paasche’s price index number, it is maintained that “If the prices of all the goods change in the same ratio, the two indices will be equal for them the weighting system is irrelevant; or if the quantities of all the goods change in the same ratio, they will be equal, for them the two weighting systems are the same relatively”.Then the above statements satisfy.a)Laspeyre’s Price index ≠ Paasche’s Price Index.b)Laspeyre’s Price Index = Paasche’s Price Index.c)Laspeyre’s Price Index may be equal Price Index.d)None of these.Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about With regard to Laspeyre’s and Paasche’s price index number, it is maintained that “If the prices of all the goods change in the same ratio, the two indices will be equal for them the weighting system is irrelevant; or if the quantities of all the goods change in the same ratio, they will be equal, for them the two weighting systems are the same relatively”.Then the above statements satisfy.a)Laspeyre’s Price index ≠ Paasche’s Price Index.b)Laspeyre’s Price Index = Paasche’s Price Index.c)Laspeyre’s Price Index may be equal Price Index.d)None of these.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With regard to Laspeyre’s and Paasche’s price index number, it is maintained that “If the prices of all the goods change in the same ratio, the two indices will be equal for them the weighting system is irrelevant; or if the quantities of all the goods change in the same ratio, they will be equal, for them the two weighting systems are the same relatively”.Then the above statements satisfy.a)Laspeyre’s Price index ≠ Paasche’s Price Index.b)Laspeyre’s Price Index = Paasche’s Price Index.c)Laspeyre’s Price Index may be equal Price Index.d)None of these.Correct answer is option 'B'. Can you explain this answer?.
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