Multiple Choice Questions
1. An index number which accounts for the relative importance of the items is known as (NCERT)
(a) Weighted index
(b) Simple aggregative index
(c) Simple average of relatives
(d) None of the above
Ans. (a) Weighted index
2. In most of the weighted index numbers the weight pertains to (NCERT)
(a) base year (b) current year
(c) both base and current year (d) None of these
Ans. (a) base year
3. The impact of change in the price of a commodity with little weight in the index will be (NCERT)
(a) small (b) large
(c) uncertain (d) None of these
Ans. (a) small
4. The item having the highest weight in consumer price index for industrial workers is (NCERT)
(a) food (b) housing
(c) clothing (d) None of these
Ans. (a) food
5. In general, inflation is calculated by using (NCERT)
(a) Wholesale Price Index (b) Consumer Price Index
(c) Producer’s Price Index (d) None of these
Ans. (a) Wholesale Price Index
6. Which of the following devices is used for measuring differences in the magnitude of a group of related variables?
(a) Arithmetic mean (b) Index number
(c) Correlation (d) Mode
Ans. (b) Index number
7. Index numbers are very helpful in comparing the economic conditions of a particular group of people for ......different periods.
(a) three (b) two
(c) four (d) None of these
Ans. (b) two
8. Statement I Construction of index numbers only needs choosing commodity basket.
Statement II Index numbers have universalacceptance.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect
Ans. (b) Statement II is correct and Statement I is incorrect
9. Statement I An appropriate method for working out consumer price index is family budget method.
Statement II Index numbers are devices formeasuring differences in the magnitude of a group of related variables.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect
Ans. (c) Both the statements are correct
10. The ...... value of index number is a pure number.
(a) average (b) commodity
(c) price relative (d) All of these
Ans. (c) price relative
11. Which of the following index numbers is based on the assumption that all the commodities are of equal importance?
(a) Weighted index number (b) Simple index number
(c) Both (a) and (b) (d) None of these
Ans. (b) Simple index number
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