What can be the exam questions using Paasche Index and Laspeyres Index?
1. Compare and contrast the Paasche Index and Laspeyres Index in terms of their calculation method and significance in measuring price level changes.
2. Calculate the Paasche and Laspeyres Price Indices for a specific set of goods with given quantities and prices. Discuss the implications of the results in terms of cost of living changes.
3. Investigate the differences between the Paasche and Laspeyres indices in capturing changes in the price level over time. Discuss the advantages and limitations of using each index for measuring inflation.
4. Explain how the Paasche and Laspeyres indices are used in economic analysis to track price movements and assess the impact of inflation on consumer purchasing power.
5. Compare the accuracy and reliability of the Paasche and Laspeyres indices in measuring price changes for different types of goods and services. Discuss potential sources of bias in each index and how they can be minimized.