Chapter 6: Index Numbers — Online MCQ Test
STATISTICS · CLASS 12th · Tamil Nadu State Board
Practice Chapter 6: Index Numbers with a free chapter-wise online MCQ test.
This chapter covers: Focusing on economic statistics this chapter covers construction methods for price quantity and value index numbers. Students master weighted index formulas including Laspeyres Paa....
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Chapter 6: Index Numbers — Important Questions & Answers
What is an index number?
- A. A measure used to compare changes in a variable or group of related variables over time
- B. A method used only to calculate averages
- C. A diagram used to represent data graphically
- D. A measure of dispersion in statistics
Answer: A. A measure used to compare changes in a variable or group of related variables over time
An index number shows relative change in a variable or a group of variables over time or place. It is widely used in economics to measure price, quantity, and value changes.
An index number shows relative change in a variable or a group of variables over time or place. It is widely used in economics to measure price, quantity, and value changes.
Which index number measures the average change in the prices paid by consumers for a fixed basket of goods?
- A. Quantity index
- B. Cost of living index
- C. Value index
- D. Simple aggregative index
Answer: B. Cost of living index
The cost of living index measures changes in consumer prices for a given consumption basket. It is also called the consumer price index in many contexts.
The cost of living index measures changes in consumer prices for a given consumption basket. It is also called the consumer price index in many contexts.
The Fisher’s Ideal Index is the geometric mean of which two indices?
- A. Laspeyres and Paasche indices
- B. Simple and weighted indices
- C. Price index and quantity index
- D. Value index and quantity index
Answer: A. Laspeyres and Paasche indices
Fisher’s Ideal Index is defined as the geometric mean of Laspeyres and Paasche indices. It is called ideal because it satisfies several important tests.
Fisher’s Ideal Index is defined as the geometric mean of Laspeyres and Paasche indices. It is called ideal because it satisfies several important tests.
Which index number is most likely to satisfy the Time Reversal Test?
- A. Laspeyres index
- B. Paasche index
- C. Fisher’s Ideal index
- D. Simple average of price relatives
Answer: C. Fisher’s Ideal index
Fisher’s Ideal Index satisfies the Time Reversal Test and is therefore called an ideal index. Laspeyres and Paasche generally do not satisfy this test.
Fisher’s Ideal Index satisfies the Time Reversal Test and is therefore called an ideal index. Laspeyres and Paasche generally do not satisfy this test.
Which of the following is the correct pair of tests satisfied by Fisher’s Ideal Index?
- A. Only Time Reversal Test
- B. Only Factor Reversal Test
- C. Both Time Reversal Test and Factor Reversal Test
- D. Neither Time Reversal Test nor Factor Reversal Test
Answer: C. Both Time Reversal Test and Factor Reversal Test
Fisher’s Ideal Index satisfies both the Time Reversal Test and the Factor Reversal Test. This is one reason it is regarded as the best theoretical index number.
Fisher’s Ideal Index satisfies both the Time Reversal Test and the Factor Reversal Test. This is one reason it is regarded as the best theoretical index number.