NCERT MCQ ON Index Numbers:
Question1 : Whose formula is considered ideal for the construction of index number?
(a) Paasche’s formula
(b) Laspeyer’s formula
(c) Fisher’s formula
(d) None of these
Answer : C
Question2 : Fisher’s Ideal index is the:
(a) Mean of Laspeyre’s and Paasche’s indexes
(b) Median of Laspeyre’s and Paasche’s indexes
(c) Geometric mean of Laspeyre’s and Paasche’s indexes
(d) None of the above
Answer : C
Question 3: Price Relatives = Current Year Price /?×100
(a) Reference year price
(b) Periodic year price
(c) Base year price
(d) Both (a) and (c)
Answer : D
Question4 : In notation P01, 1 stand for:
(a) current year
(b) reference year
(c) both (a) and (b)
(d) none of these
Answer : A
Question5 : p01=Σp1q0/Σpq0×100 is the formula of:
(a) Laspeyre’s Method
(b) Paasche’s Method
(c) Fisher’s Method
(d) none of these
Answer : A
Question6 : Fisher’s method of calculating index numbers is based on:
(a) arithmetic mean
(b) harmonic mean
(c) geometric mean
(d) none of these
Answer : C
Question7 : Fisher’s index number is considered ideal because:
(a) it is based on variable weights
(b) it satisfies Time Reversal Test
(c) it satisfies Factor Reversal Test
(d) all of these
Answer : D
Question 8: Consumer Price Index is also known as:
(a) Industrial Production Index
(b) Cost of Living Index
(c) Wholesale Price Index
(d) none of these
Answer : B
Question 9: The Paasche’s index number is based on:
(a) Base year quantities
(b) Current year quantities
(c) Average of current and base years
(d) None of the above
Answer : B
Question10 : Index number for the base period is always taken as:
(a) 100
(b) 50
(c) 1
(d) 200
Answer : A
Question11 : Indices calculated by the chain base method are free from:
(a) Seasonal variations
(b) Errors
(c) Percentages
(d) Ratios
Answer : A
Question12 : Index numbers helps in _____
(a) studying the trends
(b) deflating values
(c) policy formation
(d) All of these
Answer : D
Question13 : A monthly price index that uses the price changes in consumer goods and services for measuring the changes in consumer prices over time is known as the
(a) CPI
(b) Laspeyres Index
(c) Paasche Index
(d) IIP
Answer : A
Question 14: The aggregate index formula using base period quantities is known as:
(a) Laspeyre’s index
(b) Fisher’s Ideal index
(c) Bowley’s index
(d) Paasche’s index
Answer : A
Question15 : Cost of living index is known as …………
(a) cost price index
(b) consumer price index
(c) both
(d) none
Answer : B
Question16 : From the following which is not a problem in the construction of Index numbers?
(a) selection of base
(b) understanding of the purpose
(c) selection of commodities
(d) selection of price
Answer : D
Question17 : The index used to measure changes in total money value is called:
(a) Price index
(b) Quantity index
(c) Value index
(d) None of the above
Answer : C
Question18 : ____ mean importance assigned to different commodities included in the index
(a) Price
(b) Weights
(c) Both
(d) None
Answer : B
Question19 : We use price index numbers:
(a) To measure and compare prices
(b) To compare prices
(c) To measure prices
(d) None of these
Answer : A
Question20 : The best average for constructing an index number is:
(a) Harmonic Mean
(b) Arithmetic Mean
(c) Geometric Mean
(d) None of these
Answer : C
Question21 : Most widely used weighted index is:
(a) Laspeyres Index
(b) Paasche’s Index
(c) Fisher’s ideal Index
(d) Marshall-Edgeworth Index
Answer : A
Question22 : Commodities which show considerable price fluctuations could be best measured by a _________
(a) price index
(b) quantity index
(c) value index
(d) quality
Answer : B
Question23 : _____ in which current year quantities are used
(a) Fisher’s
(b) Paasche’s
(c) None
(d) Laspeyre’s
Answer : B
Question24 : The factor reversal test is satisfied by:
(a) Fisher’s Ideal Index
(b) Marshall-Edgeworth Method
(c) Simple GM of price relatives
(d) All of the above
Answer : A
Question25 : In chain base method, the base period is:
(a) Fixed
(b) Not fixed
(c) Constant
(d) Zero
Answer : B
Question26 : If the index of prices is estimated to be 112 in 2018, it means that in comparison to the base year, prices in 2018 are higher by:
(a) 12%
(b) 12 × 2 = 24%
(c) 112%
(d) none of these
Answer : A
Question 27: Purchasing power of money is:
(a) Reciprocal of price index number
(b) Equal to price index number
(c) Unequal to price index number
(d) All of the above
Answer : A
Question28 : A weighted aggregate price index where the weight for each item is its current-period quantity is called the
(a) Aggregate index
(b) Laspeyres Index
(c) Paasche Index
(d) Consumer Price Index
Answer : C
Question29 : Circular test is an extension of:
(a) Time reversal test
(b) Factor reversal test
(c) Circular test
(d) Unit test
Answer : A
Question30 : A composite price index where the prices of the items in the composite are weighted by their relative importance is known as the
(a) price relative
(b) weighted aggregate price index
(c) none of the above
(d) CPI
Answer : B
Question31 : If all the values are of equal importance, the index numbers are called:
(a) Weighted
(b) Unweighted
(c) Composite
(d) Value index
Answer : B
Question 32: Index numbers are expressed in
(a) Percentage
(b) Average
(c) Both
(d) None
Answer : A
Question33 : ______ are devices for measuring differences in the magnitude of a group of related variables
(a) Mean
(b) Time numbers
(c) Standard deviation
(d) Index numbers
Answer : D
Question34 : The industrial development of a country is reflected by ……………
(a) index of cost of living
(b) All
(c) index of industrial production
(d) weighted price index
Answer : C
Question 35: An index that is designed to measure changes in quantities over time is known as the
(a) Time index
(b) None of the above
(c) Paasche index
(d) Quantity index
Answer : D
Question36 : Base year is also known as:
(a) current year
(b) reference year
(c) periodic year
(d) both (a) and (c)
Answer : B
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