CA Foundation · Quantitative Aptitude · Index Numbers
In the simple aggregate method of constructing a price index number, the index for the current year is obtained as:
The simple aggregate price index equals the total of current-year prices divided by the total of base-year prices, multiplied by 100. It uses no weights, which is why quantity terms appear in neither the numerator nor the denominator.
- A(Σp1 / Σp0) × 100Correct
- B(Σp1q1 / Σp0q0) × 100
- C(Σp1q0 / Σp0q0) × 100
- DAverage of price relatives × 100
Explanation
The simple aggregate method adds up current-year prices of all items and divides by the sum of base-year prices, then multiplies by 100. No quantity weights are used. Options B and C involve quantities, so they are weighted formulae (value ratio and Laspeyres respectively).
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