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What is Chain Based Index Numbers?
Martha has $20 to spend and would like to buy as several calculators as possible along with the money. The calculators that she needs to buy are $4.50 each. How much money will she
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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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