Question

The drawbacks of the simple aggregative method are:

(I) The items with large unit prices have greater influence on the index.

(II) No weightage is given to the relative importance of the items.

• A. Both statements (I) & (II) are true
• B. Statement (I) is false but statement (II) is true
• C. Both statements (I) & (II) are false
• D. Statement (I) is true but statement (II) is false

Answer 1

The correct option is A

Both statements (I) & (II) are true

Simple aggregative method doesn't consider the relative importance of the items. Index is influenced by the items with the large unit prices.