INDEX NUMBERS MCQ
1. An index number is called a simple (d) Simple index
index when it is computed from: 8. How many types are used for the
(a) Single variable calculation of index numbers:
(b) Bi-variable (a) 2
(c) Multiple variables (b) 3
(d) None of them (c) 4
2. Index numbers are expressed in: (d) 5
(a) Ratios 9. In chain base method, the base
(b) Squares period is
(c) Percentages (a) Fixed
(d) Combinations (b) Not fixed
3. If all the values are of equal (c) Constant
importance, the index numbers are (d) Zero
called: 10. Price relatives are a percentage ratio
(a) Weighted of current year price and:
(b) Unweighted (a) Base year quantity
(c) Composite (b) Previous year quantity
(d) Value index (c) Base year price
4. Index numbers can be used for: (d) Current year quantity
(a) Forecasting 11. Indices calculated by the chain base
(b) Fixed prices method are free from:
(c) Different prices (a) Seasonal variations
(d) Constant prices (b) Errors
5. Index for base period is always taken (c) Percentages
as: (a) 100 (d) Ratios
(b) One 12. The chain base indices are not
(c) 200 suitable for:
(d) Zero (a) Long range comparisons
6. When the prices of rice are to be (b) Short range comparisons
compared, we compute: (c) Percentages
(a) Volume index (d) Ratios
(b) Value index 13. An index number that can serve
(c) Price index many purposes is called:
(d) Aggregative index (a) General purpose index
7. When index number is calculated for (b) Special purpose index
several variables, it is called: (c) Cost of living index
(a) Composite index (d) None of them
(b) Whole sale price index
(c) Volume index
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14. Another name of consumer's price (c) Price index number
index number is: (d) Simple index number
(a) Whole-sale price index number 21. For consumer price index, price
(b) Cost of living index quotations are collected from:
(c) Sensitive (a) Fair price shops
(d) Composite (b) Government depots
15. Consumer price index indicates: (c) Retailers
(a) Rise (d) Whole-sale dealers
(b) Fall 22. Price relatives computed by chain
(c) Both (a) and (b) base method are called:
(d) Neither (a) and (b) (a) Price relatives
16. Purchasing power of money can be (b) Chain indices
accessed through: (c) Link relatives
(a) Simple index (d) None of them
(b) Fisher’s index 23. The aggregative expenditure method
(c) Consumer price index and family budget method always
(d) Volume index give:
17. Cost of living at two different cities (a) Different results
can be compared with the help of: (b) Approximate results
(a) Value index (c) Same results
(b) Consumer price index (d) None of them
(c) Volume index 24. In fixed base method, the base period
(d) Un-weighted index should be:
18. Consumer price index numbers are (a) For away
obtained by: (b) Abnormal
(a) Laspeyre's formula (c) Unreliable
(b) Fisher ideal formula (d) Normal
(c) Marshall Edgeworth formula 25. If all the values are not of equal
(d) Paasche's formula importance the index number is
19. Laspeyre's index = 110, Paasche's called:
index = 108, then Fisher's Ideal (a) Simple
index is equal to: (b) Unweighted
(a) 110 (c) Weighted
(b) 108 (d) None
(c) 100 26. When the price of a year is. divided
(d) 109 by the price of a particular year we
20. Most commonly used index number get:
is: (a) Simple relative
(a) Volume index number (b) Link relative
(b) Value index number (c) (a) and (b) both
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(d) None of them 33. Base year quantities weights are used
27. When the price of a divided by the in:
price of the preceding year, we, get: (a) Laspeyre's method
(a) Value index (b) Paasche's method
(b) Link relative (c) Fisher's ideal method
(c) Simple relative (d) Difficult to tell
(d) None of them 34. Chain process is used to make
28. The most appropriate average in comparisons of price index numbers
averaging the price relatives is: in:
(a) Median (a) Price relative
(b) Harmonic mean (b) Link relative
(c) Arithmetic mean (c) Simple relative
(d) Geometric mean (d) None of the above
29. In constructing index number 35. In the computation of consumer
geometric mean relatives are: price index numbers, we use:
(a) Non-reversible (a) Aggregate expenditure method
(b) Reciprocal (b) Family budget method
(c) Reversible (c) Chain base method
(d) None of them (d) Both (a) and (b)
30. The general purchasing power of the 36. While computing a weighted index,
currency of a country is determined the current period quantities are used
by: in the:
(a) Retail price index (a) Laspeyre's method·
(b) Volume index (b) Paasche's method
(c) Composite index (c) Marshall Edgeworth method
(d) Whole-sale price index (d) Fisher's ideal method
31. What type of index number can help 37. The best method to measure the
the government to formulate its price relative change in prices of
policies and to take appropriate commodities is:
economic measures to control prices: (a) Quantity index number
(a) Whole sale price index (b) Value index number
(b) Consumer's price (c) Volume index number
(c) Quantity (d) Price index number
(d) None of them 38. When the base year values are used
32. The most suitable average in chain as weights, the weighted average of
base method is: relatives price index number is the
(a) Arithmetic mean same as the:
(b) Median (a) Laspeyre's index
(c) Mode (b) Paasche's index
(d) Geometric mean (c) Simple aggregative index
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(d) Quantity index (d) Difficult to tell
39. To measure the relative change in 44. When relative change is measured
purchasing a specified basket of for a fixed period, it is called:
goods and services between two (a) Chain base method
periods for a certain locality for fixed (b) Fixed base method
income group of people, we can use: (c) Simple aggregative method
(a) Consumer price index (d) Cost of living Index method
(b) Paasche's price index 45. The ratio of a sum of prices ill
(c) Cost of living index current period to the sum of prices ill
(d) Both (a) and (c) the base period, expressed as a
40. Fisher's ideal index number is the percentage is called:
geometric mean of the: (a) Simple price index number
(a) Laspeyre's and Marshall (b) Simple aggregative price index
Edgeworth indices number
(b) Laspeyre's and Paasche's indices (c) Weighted aggregative price index
(c) Paasche's and Marshal number
Edgeworth indices (d) Quantity index number
(d) All of the above 46. Paasche's price index number is also
41. A number that measures a relative called:
change in a single variable with (a) Base year weighted
respect to a base.is called: (b) Current year weighted
(a) Good index number (c) Simple aggregative index
(b) Composite index number (d) Consumer price index
(c) Simple index number 47. Laspeyre's price index number is
(d) Quantity index number also called:
42. A number that measures an average (a) Base year weighted
relative change in a group of related (b) Current year weighted
variables with respect to A base is (c) Cost of living index
called: (d) Simple aggregative index
(a) Simple index number 48. Index number having downward bias
(b) Composite index number is:
(c) Price index number (a) Laspeyre's index
(d) Quantity index number (b) Paasche’s index
43. An index number constructed to (c) Fisher's ideal index
measure the relative change in the (d) Marshall Edgeworth index
price of an item or a group of items 49. Index number having upward bias is:
is called: (a) Laspeyre's index
(a) Quantity index number (b) Paasche's index
(b) Price index number (c) Fisher's ideal index
(c) Volume index number (d) Marshal Edgworth index
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