Question

An index number that accounts for the relative importance of the items is known as ______

Options

• weighted index

• simple aggregative index

• simple average of relatives

Answer 1

An index number that accounts for the relative importance of the items is known as a weighted index.

Explanation:

An index number in which different items of the series are accorded weightage according to their relative importance is known as Weighted Index Numbers. It is the weighted average of the prices of different goods.