Practice - Weighted Index Method
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Practice Questions
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What is the Weighted Index Method?
💡 Hint: Think about why some items are more significant in measurements.
Why are weights important in index numbers?
💡 Hint: Consider what happens if we treat all items equally.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the primary goal of the Weighted Index Method?
💡 Hint: Think about why some items would weigh more in calculations.
True or False: The Weighted Index Method uses the same weights for all items.
💡 Hint: Remember the definition of the weighted method.
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Challenge Problems
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A company's market index consists of Gadgets (weight 0.6), Widgets (weight 0.3), and Thingamajigs (weight 0.1). If their price changes are 5%, 10%, and 15% respectively, calculate the new weighted index.
💡 Hint: Multiply each change by its respective weight and then sum them up.
Explain why using equal weights could lead to inaccuracies in economic analysis using the Weighted Index Method.
💡 Hint: Consider how consumer priorities might differ.
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