CBSE Class 11 Index Numbers MCQs Set 01

Question : 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

Question : 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 : 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

Question : In notation _P01, 1 stand for:
(a) current year
(b) reference year
(c) both (a) and (b)
(d) none of these

Answer : A 

Question : _p01=Σ_p1_q0/Σ_p0_q0×100 is the formula of:
(a) Laspeyre's Method
(b) Paasche's Method
(c) Fisher's Method
(d) none of these

Answer : A
 

Question : 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
 

Question : 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 : 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 : 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
 

Question : Index number for the base period is always taken as:
(a) 100
(b) 50
(c) 1
(d) 200

Answer : A

Question : Indices calculated by the chain base method are free from:
(a) Seasonal variations
(b) Errors
(c) Percentages
(d) Ratios

Answer : A

Question : Index numbers helps in _____
(a) studying the trends
(b) deflating values
(c) policy formation
(d) All of these

Answer : D

Question : 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 : 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

Question : Cost of living index is known as …………
(a) cost price index
(b) consumer price index
(c) both
(d) none

Answer : B

Question : 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
 

Question : 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

Question : ____ mean importance assigned to different commodities included in the index
(a) Price
(b) Weights
(c) Both
(d) None

Answer : B
 

Question : 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
 

Question : The best average for constructing an index number is:
(a) Harmonic Mean
(b) Arithmetic Mean
(c) Geometric Mean
(d) None of these

Answer : C

Question : Most widely used weighted index is:
(a) Laspeyres Index
(b) Paasche’s Index
(c) Fisher’s ideal Index
(d) Marshall-Edgeworth Index

Answer : A

Question : 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

Question : _____ in which current year quantities are used
(a) Fisher’s
(b) Paasche’s
(c) None
(d) Laspeyre’s

Answer : B

Question : 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

Question : In chain base method, the base period is:
(a) Fixed
(b) Not fixed
(c) Constant
(d) Zero

Answer : B

Question : 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 : 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

Question : 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

Question : Circular test is an extension of:
(a) Time reversal test
(b) Factor reversal test
(c) Circular test
(d) Unit test

Answer : A

Question : 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

Question : 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 : Index numbers are expressed in
(a) Percentage
(b) Average
(c) Both
(d) None

Answer : A

Question : ______ 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

Question : 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 : 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

Question : Base year is also known as:
(a) current year
(b) reference year
(c) periodic year
(d) both (a) and (c)

Answer : B