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With regard to Laspeyre's and Paasche's price index numbers, it is maintained that, "If the prices of all the goods change in the same ratio, the two indices will be equal, for then the weighting system is irrelevant, or if the quantities of all the goods change in the same ratio they will be equal, for then the two weighting systems are the same relatively." (Karmal) Prove the above.

With regard to Laspeyre's and Paasche's price index numbers, it is maintained that, "If the prices of all the goods change in the same ratio, the two indices will be equal, for then the weighting system is irrelevant, or if the quantities of all the goods change in the same ratio they will be equal, for then the two weighting systems are the same relatively." (Karmal) Prove the above.

Linear Algebra: A Modern Introduction
Linear Algebra: A Modern Introduction
4th Edition
ISBN:9781285463247
Author:David Poole
Publisher:David Poole
Chapter2: Systems Of Linear Equations
Section2.4: Applications
Problem 28EQ
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· With regard to Laspeyre's and Paasche's price index numbers, it is maintained that, "f the prices of all the goods change in the same ratio, the two indices will be equal, for then the weighting system is irrelevant, or if the quantities of all the goods change in the same ratio they will be equal, for then the two weighting systems are the same relatively." (Karmal) Prove the above.
Transcribed Image Text:· With regard to Laspeyre's and Paasche's price index numbers, it is maintained that, "f the prices of all the goods change in the same ratio, the two indices will be equal, for then the weighting system is irrelevant, or if the quantities of all the goods change in the same ratio they will be equal, for then the two weighting systems are the same relatively." (Karmal) Prove the above.
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