Statistics 1 Marks Each

The weights are included in the selection of items and they cannot be expressed numerically, then this indirect method of assigning weight is called implicit weight.

In the construction of index number, the number associated with the selected items in proportion to their importance is called weight of that item.

When the price of an item is compared with the price of the same item in some specific (fixed) year of the past, then that specific year is called the base year.

Two compare the changes in a variable at two different time period, method of relative measure (ratio) is more suitable.

In the calculation of index number, the year selected as base year should be standard or normal. It should be free from natural calamities like floods, drought, earthquake, abnormal man-made events like war, revolt, riot, strike, agitation, political events, economic disturbance or any unusual events. And it is also necessary that the base year should not be from a distant past.

The Weighted mean is the appropriate average for the construction of index number.

In chain base method, the base year changes each year.

In fixed base method a stable period or year with usual events or situation is selected as a normal year or base year. In chain base method, for every current year, its preceding year is taken as a base year.

Cost of living Index Number is used in India to find the rate of dearness allowance.

Taking preceding year as a base year of a variable quantity for the price of variable quantity for whom index number is obtained then it is called chain base index number. Here base year is repeatedly changed.

A ratio of price of the commodity in the current year with the price in the base year means price relative.

In the construction of index number, the ideal average is the geometric mean while the popular average is the weighted mean.

In family budget method, base year expenditure of an item Is taken as the weight of price relative of that item.

The given statement is not true. The correct statement Is as follows:“In the construction of an index number the Ideal average is geometric mean.”

The index number reflects the changes in all the economic conditions of the country and it also compares the values or conditions of two different time intervals. Thus, it works as a barometer for the socio-economical conditions of a country. Hence, the index number is considered as the barometer of nation’s economy.

In the construction of an index number the popular average is weighted mean.

Explicit weight is assigned according to the Importance of the item while implicit weight is implied in the selection of the item.

In fixed base method, the base year is constant, So uniformity is maintained in calculation and comparison of the relative changes in the values of the variable.

In chain base method new items can be included according to the taste and choice of the consumers.

In the construction of an index number the base year should be normal; free from natural calamities, abnormal man-made events, political events arid economic disturbances.

Fisher’s index number is the ideal index number.

Geometric mean is considered as an ideal average for the construction of index number.

The purpose of index number is to measure and compare the change observed in the value of any time variable.