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What is Chain Based Index Numbers?
A chemist has one solution which is 50% acid and a second which is 25% acid. How much of each should be mixed to make 10 litres of 40% acid solution.
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problem set d, #7
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A chain based index is one whereas the index is calculated every year by using the previous year as the base year. This kind of index measures rate of change from year to year. This method is appropriate where weights are changing rapidly and items are constantly being brought into the index and unwanted items taken out. This can be a quantity or price index.
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