Question

Paasche Index method uses

• A. Current year quantities
• B. Base year quantities
• C. Simple average of both
• D. None

Answer 1

The correct option is A Current year quantities

Paasche index, index developed by German economist Hermann Paasche for measuring current price or quantity levels relative to those of a selected base period. It differs from the Laspeyres index in that it uses current-period weighting. The Paasche price index is an index formula used in price statistics for measuring the price development of the basket of goods and services that is consumed in the current period. The question it answers is how much a basket that consumers buy in the current period would have cost in the base period.