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CA Foundation · Quantitative Aptitude · Index Numbers

When two index number series that cover an overlapping period, one with an old base and one with a new base, are combined into a single continuous series, the process is called:

The process is called splicing. It links an old index series and a new one through a common overlapping year, producing one continuous series. Base shifting merely changes the reference year of one series, and deflating converts money values into real values.

  1. ASplicingCorrect
  2. BBase shifting
  3. CDeflating
  4. DWeighting

Explanation

Splicing joins an old, discontinued series to a newer one by using a common (overlap) year so that one continuous series results. Base shifting only changes the reference year of a single series. Deflating converts nominal values into real values using a price index.

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