Index Numbers(11th Grade > Statistics ) Questions and answers for exam Preparation

11th Grade > Statistics

INDEX NUMBERS MCQs

Total Questions : 30 | Page 2 of 3 pages

Question 11.

(I) The change in any price is reflected in an index number.

(II) The wholesale price index can be used to measure the monetary and real value of national income and expenditure.

True, True
True, False
False, False
False, True

Discuss Question

Answer: Option D. -> False, True
:
D

The change in any price may or may not be reflected in a price index number as such index reflects the change in terms of averages. The wholesale price index can be used to measure the monetary and real value of national income and expenditure.

Question 12.

Construct a price index for the following using Average of price relative method.

$\begin{matrix} Items & H & K & L & M & N & O Price in 2008 & 20 & 30 & 10 & 25 & 40 & 50 Price in 2003 & 25 & 30 & 15 & 35 & 45 & 55 \end{matrix}$

122.92
100.92
99
111.92

Discuss Question

Answer: Option A. -> 122.92
:
A

$P 01 = \frac{\sum \frac{P_{1}}{P_{0}}}{n} * 100 = \frac{\frac{25}{20} \frac{30}{30} + \frac{15}{10} + \frac{35}{25} + \frac{45}{40} + \frac{55}{50}}{6} * 100$

$= \frac{1.25 + 1 + 1.5 + 1.4 + 1.125 + 1.1}{6} * 100$

$= \frac{7.375}{6} * 100 = 122.92$

Question 13.

What is the rate of inflation for the year 2014 if the CPIs for the years 2013 and 2014 are 123 and 157 respectively?

13.43
27.64
19.87
23.06

Discuss Question

Answer: Option B. -> 27.64
:
B

Given, CPI in 2013 = 123

CPI in 2014 = 157

Rate of inflation (%) = $[\frac{(CPI in 2014 - CPI in 2013)}{CPI in 2013}] * 100$

$= [\frac{(157 - 123)}{123}] * 100$

$= (\frac{34}{123}) * 100 = 27.64$

Question 14.

Index of industrial production(IIP) in India is based on prices of goods produced.

True
False
99
111.92

Discuss Question

Answer: Option B. -> False
:
B

IIP in India is based on the quantity of production of goods and not the price.

Question 15.

Under the index of industrial production, highest weightage is given to _____.

Mining
Manufacturing
Electricity
None

Discuss Question

Answer: Option B. -> Manufacturing
:
B

Manufacturing is given about 79% weightage.

Question 16.

Which of the following following is the most important consideration for the construction of an index number?

Purpose of study
Selection of base year
Selection of goods and services
Selection of method of weighting

Discuss Question

Answer: Option A. -> Purpose of study
:
A
The most significant aspect of the construction of index numbers is its purpose of study.

Question 17.

An employee currently earns a salary of Rs.15,000 per year and his salary in the base year of 1990 is Rs.3,000 per year. What should be the raise in his salary in order to maintain the same standard of living with time if the CPI today is 500?

0
Rs.15,000
Rs.5,000
None of these

Discuss Question

Answer: Option A. -> 0
:
A

Given, CPI = 500
Current Salary = Rs.15,000
Base salary = Rs.3,000
Since, CPI has become 5 times its value (100) at the base year of 1990.
Therefore, the salary should be commensurate i.e. it should also be 5 times of his salary in 1990.
$\Rightarrow$ S01 = $5 \times 3, 000$ = Rs.15,000
$\Rightarrow$ Required increase in salary = 15,000 – 15,000 = Rs. 0
$\Rightarrow$ No raise is required.

Question 18.

The CPI for industrial workers and agricultural labourers are published by Central Statistical Organisation. The Labour Bureau publishes the CPI number of urban non manual employees. This is necessary because their typical consumption baskets contain many dissimilar items.

True
False
99
111.92

Discuss Question

Answer: Option B. -> False
:
B

False. The CPI for industrial workers and agricultural labourers are published by Labour Bureau and not by the Central Statistical Organisation. On the other hand, The Central Statistical Organisation publishes the CPI number of urban non manual employees.

Question 19.

Bombay Stock exchange consists of 30 stocks which represent 13 sectors of the economy and the companies listed are leaders in their respective industries.