Question

Price relatives computed by chain base method are called:

• A. Price relatives
• B. Chain indices
• C. Link relatives
• D. None of them

Answer 1

The correct option is C Link relatives

$\Rightarrow$ Price relatives computed by chain base method are called $Linkrelatives.$

$\Rightarrow$ Under this method, the base year’s price does not remain fixed but moves step from year to year. In other words, the immediately preceding year’s price becomes the base year’s price for each of the succeeding years.

$\Rightarrow$ Under this method, the base year’s price does not remain fixed but moves step from year to year. In other words, the immediately preceding year’s price becomes the base year’s price for each of the succeeding years.

$\Rightarrow$ $Chainindex$ = $\frac{Averagelinkrelativeofcurrentyear\times Chainindexofpreviousyear}{100}$