Question

Suppose we have to prepare a price index number constituting three goods A, B and C. For the year 2008 and 2009. We are given the following information:

Answer 1

`L=sum(p_(1)q_(o))/(p_(o)q_(o)) xx100=(440)/(380)xx100=116 " approx".`
`P=sum(p_(1)q_(1))/(p_(o)q_(1)) xx100=(490)/(370)xx100=132 " approx".`
`F=sqrt("L P")=sqrt(116xx132)=124" approx". `