Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 9: Q 20. (page 243)

What is indexing?

Short Answer

Expert verified

Price index is an indicator that shows changes in the price level of a select basket of goods. Its a financial tool used to make policies.

Step by step solution

01

Step 1. Introduction

Indexing is used by economists to tell the market trends to the public.

02

Step 2. Definition

Indexing is a method of creating an indicator to measure changes in variables such as price level.

It is used as a statistical measure for tracking economic data like inflation, unemployment, productivity, market returns, and GDP.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Edna is living in a retirement home where most of her needs are taken care of, but she has some discretionary spending. Based on the basket of goods in Table 9.5, by what percentage does Edna’s cost of living increase between

time 1 and time 2?

Over the last century, during what periods were the

U.S. inflation rate highest and lowest?

Why is the GDP deflator not an accurate measure of inflation as it impacts a household?

Imagine that the government statisticians who calculate the inflation rate have been updating the basic basket of goods once every 10 years, but now they decide to update it every five years. How will this change affect the amount of substitution bias and quality/new goods bias?

Describe a situation, either a government policy situation, an economic problem, or a private sector situation, where using the GDP deflator to convert from nominal to real would be more appropriate than using the CPI.
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free