Answer: Overestimate inflation.
- A Underestimate inflation
- B Overestimate inflation
- C Give exact inflation
- D Equal Paasche index always
Correct answer: B. Overestimate inflation
Explanation: Laspeyres (base-year weights) tends to overestimate inflation because it ignores substitution away from expensive goods. Paasche (current-year weights) tends to underestimate.
In a perfectly normal (bell-shaped) distribution, mean, median, and mode all coincide at the centre; about 68% of data falls within 1 standard deviation of the mean, 95% within 2, and 99.7% within 3 - the empirical rule used to judge how typical or extreme a value is.
Concept context
Mean, median, mode, standard deviation, and data interpretation