Under the Chain base method, the base period is defined as ________________?
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Answer: C. Change
Explanation
The chain base index method uses the immediately preceding time period as the base. Because previous periods shift forward continuously, the reference base period changes constantly. This method links relative changes from one sequential period to the next. Index numbers track economic changes over time relative to a chosen reference standard. Fixed base methods maintain a single permanent comparison period throughout analysis. Chain base methods accommodate changing market baskets and new product introductions easily.
Economic inflation tracking often utilizes chain weighting to reflect current consumer habits. Financial analysts use chain base indices to measure short-term sequential growth rates. Comparing chain and fixed base indices helps economists analyze long-term trends accurately. Option A is incorrect because fixed describes base periods that never change. Option B is wrong since constant base periods are used in fixed base index methods. Option D is incorrect because option C correctly identifies that the base changes.
- Subject
- Mathematics
- Category
- Statistics
- Topic
- —
- Difficulty
- medium
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