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Economics M.C.Q (1 Marks)

Index Numbers · CBSE STD 11 Commerce (CBSE - English Medium). 72 questions.

Questions

M.C.Q (1 Marks)

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72 questions · 70 auto-graded MCQ + 2 self-marked written.

MCQ 11 Mark
The Paasche’s index number is based on:
  • A
    Base year quantities.
  • ✓
    Current year quantities.
  • C
    Average of current and base years.
  • D
    None of the above.
Answer
Correct option: B.
Current year quantities.
Current year quantities.
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MCQ 21 Mark
An index number is used to measure changes in:
  • A
    Quantity only.
  • B
    Demand only.
  • ✓
    Avariable over time.
  • D
    Price only.
Answer
Correct option: C.
Avariable over time.
Avariable over time.
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MCQ 31 Mark
If with the rise of $10\%$ in prices the wages are increased by $20\%,$ the real wage increase by$...........\%.$
  • A
    $20$
  • ✓
    $10$
  • C
    $30$
  • D
    $2$
Answer
Correct option: B.
$10$
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MCQ 41 Mark
Consumer Price Index is also known as:
  • A
    Industrial Production Index.
  • ✓
    Cost of Living Index.
  • C
    Wholesale Price Index.
  • D
    None of these.
Answer
Correct option: B.
Cost of Living Index.
Cost of Living Index.
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MCQ 51 Mark
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.
  • ✓
    All of these.
Answer
Correct option: D.
All of these.
All of these.
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MCQ 61 Mark
The best average for constructing an index numbers is:
  • A
    Harmonic mean.
  • B
    Arithmetic mean.
  • ✓
    Geometric mean.
  • D
    None of these.
Answer
Correct option: C.
Geometric mean.
Geometric mean.
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MCQ 71 Mark
Fisher's index number is the:
  • A
    Arithmetic mean of index numbers of Laspeyre and Passche.
  • B
    Harmonic mean of index number of Laspeyre and Paasche.
  • ✓
    Geometric mean of index numbers of Laspeyre and Passche.
  • D
    None of the above.
Answer
Correct option: C.
Geometric mean of index numbers of Laspeyre and Passche.
Geometric mean of index numbers of Laspeyre and Passche.
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MCQ 81 Mark
Fisher's index number satisfies:
  • A
    Time Reversal Test.
  • B
    Factor Reversal Test.
  • ✓
    Both (a) and (b).
  • D
    None of these.
Answer
Correct option: C.
Both (a) and (b).
Both (a) and (b).
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MCQ 91 Mark
Which of the following is also known as cost of living index?
  • ✓
    Consumer Price Index.
Answer
Correct option: A.
Consumer Price Index.
Consu​​​​​​​mer Price Index.
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MCQ 101 Mark
We use price index numbers:
  • ✓
    To measure and compare prices.
  • B
    To compare prices.
  • C
    To measure prices.
  • D
    None of these.
Answer
Correct option: A.
To measure and compare prices.
To measure and compare prices.
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MCQ 111 Mark
In Laspeyre's index number, the weight pertains to:
  • ✓
    Base year quantities.
  • B
    Current year.
  • C
    Both (a) and (b).
  • D
    None of the above.
Answer
Correct option: A.
Base year quantities.
Base year quantities.
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MCQ 121 Mark
In most of the weighted index numbers, the weight pertains to:
  • A
    Base year.
  • B
    Current year.
  • C
    Both base and current year.
  • ✓
    Base year or current year.
Answer
Correct option: D.
Base year or current year.
Base year or current year.
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MCQ 131 Mark
Which of the following index numbers is based on the assumption that all the commodities are of equal importance?
  • A
    Weighted index number.
  • ✓
    Simple index number.
  • C
    Both (a) and (b).
  • D
    None of the above.
Answer
Correct option: B.
Simple index number.
Simple index number.
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MCQ 141 Mark
Fisher's index number is based on:
  • A
    The Arithmetic mean of Laspeyre's and Paasche's index numbers.
  • B
    The Median of Laspeyre's and Paasche's index numbers.
  • ✓
    The Geometric Mean Laspeyre's and Paasche's index numbers.
  • D
    None of these.
Answer
Correct option: C.
The Geometric Mean Laspeyre's and Paasche's index numbers.
The Geometric Mean Laspeyre's and Paasche's index numbers.
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MCQ 151 Mark
Index numbers are very helpful in comparing the economic conditions of a particular group of people for __________ different periods:
  • A
    Three.
  • ✓
    Two.
  • C
    Four.
  • D
    None of these.
Answer
Correct option: B.
Two.
Two.
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MCQ 161 Mark
Purchasing power of money is:
  • ✓
    Reciprocal of price index number.
  • B
    Unequal to price index number.
  • C
    Equal to price index number.
  • D
    None of the above of the above.
Answer
Correct option: A.
Reciprocal of price index number.
Reciprocal of price index number.
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MCQ 171 Mark
Which is the symbol of the price of the current year?
  • A
    $P_0$
  • ✓
    $P_1$
  • C
    $P_2$
  • D
    None of these.
Answer
Correct option: B.
$P_1$
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MCQ 181 Mark
The weight assigned to compute $\text{CPI} \ ($Combined Category$)$ for miscellaneous items is:
  • A
    $24.91$
  • B
    $28$
  • ✓
    $26.31$
  • D
    None of these.
Answer
Correct option: C.
$26.31$
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MCQ 191 Mark
Rate of inflation is equal to:
  • A
    $\frac{\text{A}_1}{\text{A}_2}+\text{A}_1\times100$
  • B
    $\frac{\text{A}_2+\text{A}_1}{\text{A}_1\times100}$
  • C
    $\frac{\text{A}_1}{\text{A}_2}-\text{A}_1\times100$
  • ✓
    $\frac{\text{A}_2-\text{A}_1}{\text{A}_1\times100}$
Answer
Correct option: D.
$\frac{\text{A}_2-\text{A}_1}{\text{A}_1\times100}$
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MCQ 201 Mark
Simple aggregate of quantities is a type of:
  • ✓
    Quantity control.
  • B
    Quantity indices.
  • C
    Both.
  • D
    None.
Answer
Correct option: A.
Quantity control.
Quantity indices.
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MCQ 211 Mark
Index number represents the relative changes that are:
  • A
    Expressed in numbers.
  • ✓
    Expressed in percentage.
  • C
    Expressed as an average.
  • D
    Both (a) and (c).
Answer
Correct option: B.
Expressed in percentage.
Expressed in percentage.
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MCQ 231 Mark
Index numbers are calculated in terms of:
  • ✓
    Percentage.
  • B
    Data.
  • C
    Ratio.
  • D
    None of these.
Answer
Correct option: A.
Percentage.
Percentage.
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MCQ 241 Mark
________ play a very important part in the construction of index nos.
  • ✓
    Weights.
  • B
    Classes.
  • C
    Estimations.
  • D
    None.
Answer
Correct option: A.
Weights.
Weights.
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MCQ 251 Mark
Fisher’s method of calculating index numbers is based on:
  • A
    Arithmetic mean.
  • B
    Harmonic mean.
  • ✓
    Geometric mean.
  • D
    None of these.
Answer
Correct option: C.
Geometric mean.
Geometric mean.
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MCQ 261 Mark
Paasche's index number is expressed in terms of:
  • A
    $\frac{\sum\text{P}_\text{n}\text{q}_\text{n}}{\sum\text{P}_0\text{q}_\text{n}}$
  • B
    $\frac{\sum\text{P}_\text{0}\text{q}_\text{0}}{\sum\text{P}_\text{n}\text{q}_0}$
  • ✓
    $\frac{\sum\text{P}_\text{n}\text{q}_\text{n}}{\sum\text{P}_0\text{q}_\text{n}}$
  • D
    $\frac{\sum\text{P}_\text{n}\text{q}_\text{0}}{\sum\text{P}_0\text{q}_\text{0}}\times100$
Answer
Correct option: C.
$\frac{\sum\text{P}_\text{n}\text{q}_\text{n}}{\sum\text{P}_0\text{q}_\text{n}}$
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MCQ 271 Mark
Historically the first index number is constructed in the year$..........$
  • ✓
    $1764$
  • B
    $1776$
  • C
    $1881$
  • D
    $1921$
Answer
Correct option: A.
$1764$
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MCQ 281 Mark
The ___________ value of index number is a pure number:
  • A
    Average.
  • B
    Commodity.
  • ✓
    Price relative.
  • D
    All of these.
Answer
Correct option: C.
Price relative.
Price relative.
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MCQ 291 Mark
$\text{P}_{01}=\frac{\Sigma\text{p}_1\text{q}_1}{\Sigma\text{p}_0\text{q}_1}\times100$ a formula for the calculation of price index number is given by:
  • A
    Marshall Edgeworth.
  • ✓
    Paasche.
  • C
    Laspeyre.
  • D
    Fisher.
Answer
Correct option: B.
Paasche.
Paasche.
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MCQ 301 Mark
Which of the following index number, indicates the change in the industrial production?
  • A
    Nifty.
  • B
    $\text{GDP}.$
  • C
    $\text{CPI}.$
  • ✓
    $\text{IIP}.$
Answer
Correct option: D.
$\text{IIP}.$
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MCQ 311 Mark
In general, inflation is calculated by using:
  • A
    Wholesale price index.
  • B
    Consumer price index.
  • C
    Producers’ price index.
  • D
    None of these.
Answer
The wholesale price index $\text{(WPI)}$ is a widely used price index as an indicator of the rate of inflation in the economy. This indicates the movement in prices of commodities in all trading transactions. This index is helpful in forecasting the demand and supply of commodities in the market.
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MCQ 321 Mark
If the index number of prices at a place in $1994$ is $250$ with $1984$ as base year, then the prices have increased on average
  • A
    $250$
  • ✓
    $150$
  • C
    $350$
  • D
    None of these.
Answer
Correct option: B.
$150$
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MCQ 331 Mark
Which index number indicates the change in the general price level?
  • A
    Agricultural Production Index.
  • ✓
    Wholesale Price Index.
  • C
    Cost of Living Index.
  • D
    Industrial Production Index.
Answer
Correct option: B.
Wholesale Price Index.
Wholesale Price Index.
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MCQ 341 Mark
Base year is also known as:
  • A
    Current year.
  • ✓
    Reference year.
  • C
    Periodic year.
  • D
    Both (a) and (c).
Answer
Correct option: B.
Reference year.
Reference year.
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MCQ 351 Mark
We use price index numbers:
  • ✓
    To measure and compare prices.
  • B
    To measure prices.
  • C
    To compare prices.
  • D
    None of these.
Answer
Correct option: A.
To measure and compare prices.
To measure and compare prices.
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MCQ 361 Mark
The index used to measure changes in total money value is called:
  • A
    Price index.
  • B
    Quantity index.
  • ✓
    Value index.
  • D
    None of the above.
Answer
Correct option: C.
Value index.
Value index.
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MCQ 371 Mark
In notation P01, 1 stand for:
  • A
    Current year.
  • ✓
    Reference year.
  • C
    Both (a) and (b).
  • D
    None of these.
Answer
Correct option: B.
Reference year.
Current year.
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MCQ 381 Mark
A consumer price index measures changes in:
  • ✓
    Retail prices.
  • B
    Wholesale prices.
  • C
    Producers prices.
  • D
    None of these.
Answer
Correct option: A.
Retail prices.

The Consumer Price Index $\text{(CPI)}$ measures changes in retail prices, and hence, it is also known as retail price index numbers. It measures the average changes in retail prices to show the accurate impact of price rise on the cost of living of the people.

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MCQ 391 Mark
Price Relatives = Current Year Price? × 100:
  • A
    Reference year price.
  • B
    Periodic year price.
  • C
    Base year price.
  • ✓
    Both (a) and (c).
Answer
Correct option: D.
Both (a) and (c).
Both (a) and (c).
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MCQ 421 Mark
A quantity index that is designed to measure changes in physical volume or production level of industrial goods over time is known as:
  • A
    Physical Volume Index.
  • B
    Time Index.
  • ✓
    Index of Industrial Production.
  • D
    None of the above
Answer
Correct option: C.
Index of Industrial Production.
Index of Industrial Production.
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MCQ 431 Mark
Whose formula is considered ideal for the construction of index number?
  • A
    Paasche’s formula.
  • B
    Laspeyer’s formula.
  • ✓
    Fisher’s formula.
  • D
    None of these.
Answer
Correct option: C.
Fisher’s formula.
Fisher’s formula.
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MCQ 441 Mark
A series of numerical figures which show the relative position is called:
  • A
    Index number.
  • ✓
    Relative number.
  • C
    Absolute Number.
  • D
    None of the above.
Answer
Correct option: B.
Relative number.
Relative number.
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MCQ 451 Mark
The best average for constructing an index number is:
  • A
    Harmonic Mean.
  • B
    Arithmetic Mean.
  • ✓
    Geometric Mean.
  • D
    None of these.
Answer
Correct option: C.
Geometric Mean.
Geometric Mean.
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MCQ 461 Mark
The item having the highest weight in consumer price index for industrial workers is:
  • ✓
    Food.
  • B
    Housing.
  • C
    Clothing.
  • D
    None of these.
Answer
Correct option: A.
Food.
Food is the most essential commodity for living. Industrial workers have to spend more on food because they are engaged in physical labour.
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MCQ 471 Mark
Price$-$relative is expressed in terms of:
  • A
    $\text{P}=\frac{\text{P}_\text{n}}{\text{P}_0}$
  • B
    $\text{P}=\frac{\text{P}_\text{0}}{\text{P}}$
  • ✓
    $\text{P}=\frac{\text{P}_\text{n}}{\text{P}_0}\times100$
  • D
    $\text{P}=\frac{\text{P}_\text{0}}{\text{P}_0}\times100$
Answer
Correct option: C.
$\text{P}=\frac{\text{P}_\text{n}}{\text{P}_0}\times100$
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MCQ 481 Mark
Paasche index is based on:
  • A
    Base year quantities.
  • ✓
    Current year quantities.
  • C
    Average of current and base year.
  • D
    None of these.
Answer
Correct option: B.
Current year quantities.
Current year quantities.
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MCQ 491 Mark
Index numbers can measure the averages of variables with _______ units:
  • ✓
    Same.
  • B
    Diverse.
  • C
    Both (a) and (b).
  • D
    None of these.
Answer
Correct option: A.
Same.
Same.
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MCQ 501 Mark
An index number which accounts for the relative importance of the items is known as:
  • ✓
    Weighted index.
  • B
    Simple aggregative index.
  • C
    Simple average of relatives.
  • D
    None of these.
Answer
Correct option: A.
Weighted index.
An index number in which different items of the series are accorded weight age according to their relative importance is known as Weighted Index Numbers. It is the weighted average of the prices of different goods.
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MCQ 511 Mark
Fisher’s Ideal index is the:
  • A
    Mean of Laspeyre’s and Paasche’s indexes.
  • B
    Median of Laspeyre’s and Paasche’s indexes.
  • ✓
    Geometric mean of Laspeyre’s and Paasche’s indexes.
  • D
    None of the above.
Answer
Correct option: C.
Geometric mean of Laspeyre’s and Paasche’s indexes.
Geometric mean of Laspeyre’s and Paasche’s indexes.
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MCQ 521 Mark
Consumer Price Index number for the year 1957 was 313 with 1940 as the base year, the average monthly wages in 1957 of the workers in a factory was *160. Their real wage is:
  • A
    48.40
  • ✓
    51.12
  • C
    40.30
  • D
    None of these.
Answer
Correct option: B.
51.12
51.12
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MCQ 541 Mark
Laspayer's index is based on:
  • ✓
    Base year quantities.
  • B
    Current year quantities.
  • C
    Average of current and base year.
  • D
    None of these.
Answer
Correct option: A.
Base year quantities.
Base year quantities.
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MCQ 551 Mark
Index no. is equal to:
  • A
    Sum of price relatives.
  • ✓
    Average of the price relatives.
  • C
    Product of price relatives.
  • D
    None.
Answer
Correct option: B.
Average of the price relatives.
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MCQ 561 Mark
Cost of living index numbers are also used to find real wage by the process of:
  • A
    Base shifting.
  • B
    Splicing of index number.
  • ✓
    Deflating of index number.
  • D
    None of the above.
Answer
Correct option: C.
Deflating of index number.
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MCQ 571 Mark
The aggregate index formula using base period quantities is known as:
  • ✓
    Laspeyre’s index.
  • B
    Fisher’s Ideal index.
  • C
    Bowley’s index.
  • D
    Paasche’s index.
Answer
Correct option: A.
Laspeyre’s index.
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MCQ 581 Mark
Which of the following statement is false?
  • A
    The base period should be a normal period.
  • ✓
    The base year quantities are used as weights in Paasche's method.
  • C
    Fisher's Index is called Ideal index.
  • D
    Laspeyer's Index makes use of base year quantities as weight.
Answer
Correct option: B.
The base year quantities are used as weights in Paasche's method.
The base year quantities are used as weights in Paasche's method.
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MCQ 591 Mark
Fisher's Ideal Index number is expressed in terms of:
  • ✓
    $\text{(P}_\text{on})^\text{F}=\sqrt{\text{Laspeyer's Index}\times(\text{Paashe's Index})}$
  • B
    $\text{(P}_\text{on})^\text{F}=\text{Laspeyer's Index}\times'\text{Paashe's Index}'$
  • C
    $\text{(P}_\text{on})^\text{F}=\ \sqrt{\text{Marshall Edge worth Index}\times\text{Paashe's Index}}$
  • D
    None of these.
Answer
Correct option: A.
$\text{(P}_\text{on})^\text{F}=\sqrt{\text{Laspeyer's Index}\times(\text{Paashe's Index})}$
$\text{(P}_\text{on})^\text{F}=\sqrt{\text{Laspeyer's Index}\times(\text{Paashe's Index})}$
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MCQ 601 Mark
Which of the following measures changes in retail price of the commodities?
  • A
    Wholesale Price Index.
  • B
    Weighted Index.
  • ✓
    Consumer Price Index.
  • D
    None of the above.
Answer
Correct option: C.
Consumer Price Index.
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MCQ 611 Mark
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:
  • ✓
    $12\%$
  • B
    $12 \times 2 = 24\%$
  • C
    $112\%$
  • D
    None of these.
Answer
Correct option: A.
$12\%$
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MCQ 621 Mark
Price of top 30 shares of Bombay Stock Exchange increased, which of these will increase?
  • A
    WPI.
  • B
    CPI.
  • C
    Inflation rate.
  • ✓
    Sensex.
Answer
Correct option: D.
Sensex.
Sensex.
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MCQ 631 Mark
Index number serves as a _________ for measuring the value of money:
  • A
    Parameter.
  • ✓
    Barometer.
  • C
    Both (a) and (b).
  • D
    None of these.
Answer
Correct option: B.
Barometer.
Barometer.
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MCQ 641 Mark
In most of the weighted index numbers the weight pertains to:
  • A
    Base year.
  • ✓
    Current year.
  • C
    Both base and current year.
  • D
    None of these.
Answer
Correct option: B.
Current year.

In the Weighted Method of calculating index numbers, different goods are accorded weights according to the quantity brought. Laspeyre’s method uses base year’s quantities as weights, Paasche’s method uses current year’s quantities as weights and Fisher's method uses both base year as well as current year’s quantities as base.

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MCQ 651 Mark
The impact of change in the price of a commodity with little weight in the index will be:
  • ✓
    Small.
  • B
    Large.
  • C
    Uncertain.
  • D
    None of these.
Answer
Correct option: A.
Small.

Whether the change in price will be reflected in a price index number or not depends on the weight associated with the item. Lower or negligible weight reflects lower or negligible change in the index number and higher weight reflects higher change in the index number.

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MCQ 661 Mark
___________ is the benchmark index for the Indian stock market:
  • A
    Price index.
  • B
    Agricultural index.
  • ✓
    Sensex.
  • D
    None of these.
Answer
Correct option: C.
Sensex.
Sensex.
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MCQ 671 Mark
If the prices of all commodities in a place have increased 1.25 times in comparison to the base period, the index number of prices of that place is now:
  • ✓
    125
  • B
    150
  • C
    225
  • D
    None of these.
Answer
Correct option: A.
125
125
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MCQ 681 Mark
Which index measures the month to month change in cost of a representative basket of goods and services bought by a typical household?
  • ✓
    Retail Price Index.
  • B
    Wholesale Price Index.
  • C
    Fisher's Index.
  • D
    Paasche's Index.
Answer
Correct option: A.
Retail Price Index.
Retail Price Index.
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MCQ 691 Mark
If the prices of all commodities in a place have decreased $35\%$ over the base period prices, then the index number of prices of that place is now:
  • A
    $35$
  • B
    $135$
  • ✓
    $65$
  • D
    None of these.
Answer
Correct option: C.
$65$
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MCQ 701 Mark
Consumer Price Index $\text{(CPI)}$ is expressed in terms of:
  • A
    $\frac{\sum\text{P}_\text{n}\text{q}_\text{n}}{\sum\text{P}_0\text{q}_\text{n}}$
  • B
    $\frac{\sum\text{P}_\text{0}\text{q}_\text{0}}{\sum\text{P}_\text{n}\text{q}_0}$
  • C
    $\frac{\sum\text{P}_\text{n}\text{q}_\text{n}}{\sum\text{P}_0\text{q}_\text{n}}\times100$
  • ✓
    None of these.
Answer
Correct option: D.
None of these.
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MCQ 711 Mark
Which of the following devices is used for measuring differences in the magnitude of a group of related variables?
  • A
    Arithmetic mean.
  • ✓
    Index number.
  • C
    Correlation.
  • D
    Mode.
Answer
Correct option: B.
Index number.
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MCQ 721 Mark
Index of industrial production is a __________ of quantitative relative:
  • A
    Simple average.
  • ✓
    Weighted average.
  • C
    Both (a) and (b).
  • D
    None of these.
Answer
Correct option: B.
Weighted average.
Weighted average.
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