How to calculate the a price index, Microeconomics

Assignment Help:

Why does a price index based on constant weights tend to overstate inflation in periods after the base year when the price of one good is rising quickly compared to other goods?

Because people tend to buy cheaper substitutes instead of the good whose price is quickly increasing.  But the constant-weight index includes the similar quantities of the expensive goods.

 


Related Discussions:- How to calculate the a price index

Microeconomics in study of managerial economics, What is the importance of ...

What is the importance of microeconomics in study of managerial economics?   Normal 0 false false false EN-IN X-NONE X-NONE

Indifference curves, Indifference curves present all possible combinations ...

Indifference curves present all possible combinations of market baskets that give the similar level of satisfaction to a person. Indifference Curves 1. Indifferen

Describe trade unions and collusion among employees, Trade union can also p...

Trade union can also pay a useful role in improving the wages of the workers without causing adverse effects on employment. This case which is intensely associated with the idea of

Phillips curve and inflation-unemployment in policy making, Phillips Curve ...

Phillips Curve and Inflation-Unemployment in policy making : In the General Theory (Keynes, 1936) we noted that the state of expectations was taken as given. There was, in ad

Labor deman, Discuss two factors that would increase demand for labortion.....

Discuss two factors that would increase demand for labortion..

Compute numerically the equilibrium quantity, You are examining the effects...

You are examining the effects of a specific tax of 10 cents imposed on the sales of a product that we shall call XYZ. To carry out your analysis, assume that the market is a perfec

Cost sharing in higher education - student loans, Cost Sharing in Higher Ed...

Cost Sharing in Higher Education - Student Loans The method is popular as it directly targets only those who are the recipients of the benefits of higher education.The method

Demand and supply help!, Using a demand and supply diagram,analyse the effe...

Using a demand and supply diagram,analyse the effect on the market for Ghanaian football shirts. a. A fall in incomes in Ghana and neighboring countries

Marginal product theory, Marginal Product Theory a.    What is the MC ...

Marginal Product Theory a.    What is the MC of output in the short-run? b.    What is the MC of labor (employed)? c.    What is the short-run profit-maximizing decision

Explain about the deadweight loss and elasticitie, Explain about the deadwe...

Explain about the deadweight loss and elasticitie s. Deadweight Loss and Elasticities The general rule for economic policy is the other things equivalent; you need to choose

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd