Which statement is true about the aggregate quantity index?

• A. It is quicker than the relative quantity index
• B. It is more accurate than the relative quantity index
• C. It ignores price changes
• D. It requires prices only

Answer: (A)

The idea being tested is how the index that summarizes quantity changes across all items is computed more quickly than the item-by-item approach.

An aggregate quantity index is formed by simply summing all current-period quantities and all base-period quantities, then taking the ratio of these two totals. That one-step ratio gives the overall quantity change without handling each item separately.

In contrast, the relative quantity index requires calculating a quantity relative for each item (current quantity divided by base quantity) and then combining those item relatives, often with weights, to arrive at a single figure. That adds extra calculations and data handling, making it slower.

So the aggregate quantity index is the quicker method. (Prices aren’t the focus here, since this measure is about quantities.)