Question

Quantity index number by weighted aggregate method is given by ..............

Hint:

For any index, remember \(\frac{\sum (\text{current})}{\sum (\text{base})} \times 100\). For a {quantity} index, the changing variables are quantities (\(q_1\) and \(q_0\)). The weights (prices) are the constant part. Laspeyres uses base-year weights (\(p_0\)), while Paasche uses current-year weights (\(p_1\)).

Answer 1

A weighted aggregate quantity index number measures the change in the quantity of a group of items over time, with each item's quantity being weighted by its importance (usually its price). The general formula is \( \frac{\sum q_1 w}{\sum q_0 w} \times 100 \), where \(q_1\) is the current year quantity, \(q_0\) is the base year quantity, and \(w\) is the weight. The most common form is Laspeyres' Quantity Index, which uses base year prices (\(p_0\)) as weights: \[ Q_{01}(L) = \frac{\sum q_1 p_0}{\sum q_0 p_0} \times 100 \]