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All questions of Index Numbers for Commerce Exam
Which of the following is/are an example/s of weighted price index?
(a) Consumer price index
(b) Wholesale price index
(c) Sensex- a)(a) and (b)
- b)(b) and (c)
- c)Only (a)
- d)All (a), (b) and (c)
Correct answer is option 'D'. Can you explain this answer?
Which of the following is/are an example/s of weighted price index?
(a) Consumer price index
(b) Wholesale price index
(c) Sensex
(a) Consumer price index
(b) Wholesale price index
(c) Sensex
a)
(a) and (b)
b)
(b) and (c)
c)
Only (a)
d)
All (a), (b) and (c)
|
Gaurav Kumar answered |
The following are examples of weighted price index:
(a) Consumer price index
(b) Wholesale price index
(c) Sensex
(a) Consumer price index
(b) Wholesale price index
(c) Sensex
To calculate purchasing power of money and real wages we use- a)income index.
- b)consumer price index.
- c)wholesale price index.
- d)retail price index.
Correct answer is option 'B'. Can you explain this answer?
To calculate purchasing power of money and real wages we use
a)
income index.
b)
consumer price index.
c)
wholesale price index.
d)
retail price index.
|
Aryan Khanna answered |
Consumer price index number or cost of living index helps in measuring the changes in the purchasing power of money and real income.
Commodities are broadly classified into three categories namely primary articles, fuel, power, light and lubricants and manufactured products to calculate- a)Income Index Number.
- b)Consumer Price Index.
- c)Wholesale Price Index.
- d)Production Index.
Correct answer is option 'C'. Can you explain this answer?
Commodities are broadly classified into three categories namely primary articles, fuel, power, light and lubricants and manufactured products to calculate
a)
Income Index Number.
b)
Consumer Price Index.
c)
Wholesale Price Index.
d)
Production Index.
|
Uday Chakraborty answered |
Wholesale Price Index (WPI)
WPI is a measure of the change in the price of goods sold in wholesale markets. It is used to calculate the inflation rate and is an important indicator of the economic situation of a country. The WPI is calculated by taking the average of the prices of a basket of goods that are sold in wholesale markets.
Classification of Commodities
Commodities are broadly classified into three categories, namely:
1. Primary Articles - These are the raw materials that are used in the production of goods. Examples include food grains, vegetables, fruits, milk, etc.
2. Fuel, Power, Light, and Lubricants - These are the commodities that are used as energy sources. Examples include coal, petroleum, electricity, etc.
3. Manufactured Products - These are the finished goods that are produced from raw materials. Examples include textiles, machinery, chemicals, etc.
WPI Calculation
The WPI is calculated by taking into account the prices of goods in each of these categories. The prices are weighted according to the importance of each commodity in the economy. The weightage of different commodities is based on their share in the total value of production.
Therefore, the correct option is C, as the Wholesale Price Index is used to calculate the inflation rate and is based on the prices of goods in each of the three categories of commodities.
WPI is a measure of the change in the price of goods sold in wholesale markets. It is used to calculate the inflation rate and is an important indicator of the economic situation of a country. The WPI is calculated by taking the average of the prices of a basket of goods that are sold in wholesale markets.
Classification of Commodities
Commodities are broadly classified into three categories, namely:
1. Primary Articles - These are the raw materials that are used in the production of goods. Examples include food grains, vegetables, fruits, milk, etc.
2. Fuel, Power, Light, and Lubricants - These are the commodities that are used as energy sources. Examples include coal, petroleum, electricity, etc.
3. Manufactured Products - These are the finished goods that are produced from raw materials. Examples include textiles, machinery, chemicals, etc.
WPI Calculation
The WPI is calculated by taking into account the prices of goods in each of these categories. The prices are weighted according to the importance of each commodity in the economy. The weightage of different commodities is based on their share in the total value of production.
Therefore, the correct option is C, as the Wholesale Price Index is used to calculate the inflation rate and is based on the prices of goods in each of the three categories of commodities.
IIP i.e. industrial index of production includes- a)only production of the private sectors
- b)only production of the public sectors
- c)production of the public and private sector
- d)Primary sector
Correct answer is option 'C'. Can you explain this answer?
IIP i.e. industrial index of production includes
a)
only production of the private sectors
b)
only production of the public sectors
c)
production of the public and private sector
d)
Primary sector
|
Sunil Chahar answered |
IIP measures the changes in the level of industrial production comprising many industries.
The value of sensex is with reference to the year- a)1978-79.
- b)1979-80.
- c)1980-81
- d)1981-82
Correct answer is option 'A'. Can you explain this answer?
The value of sensex is with reference to the year
a)
1978-79.
b)
1979-80.
c)
1980-81
d)
1981-82
|
|
Gaurav Kumar answered |
SENSEX is the short form of Bombay Stock Exchange Sensitive Index with 1978-79 base. It consists of 13 stocks which represent 13 sectors of the economy.
The index number that does not have any reference consumer category is- a)WPI
- b)CPI
- c)IIP
- d)cost of living index
Correct answer is option 'A'. Can you explain this answer?
The index number that does not have any reference consumer category is
a)
WPI
b)
CPI
c)
IIP
d)
cost of living index
|
Sanjeev Kumar answered |
The wholesale price index number indicates the change in the general price level.
The number of CPI constructed in India is- a)one
- b)two
- c)three
- d)five
Correct answer is option 'C'. Can you explain this answer?
The number of CPI constructed in India is
a)
one
b)
two
c)
three
d)
five
|
Sharmila Sharma answered |
Consumer price index is also known as cost of living index. In India three types of Index numbers are constructed. They are as follows:
- CPI for industrial worker
- CPI for agricultural worker
- CPI for urban non-manual labourers
The price at which the commodity is sold in huge quantity is called- a)retail price.
- b)wholesale price.
- c)market price.
- d)sale price.
Correct answer is option 'B'. Can you explain this answer?
The price at which the commodity is sold in huge quantity is called
a)
retail price.
b)
wholesale price.
c)
market price.
d)
sale price.
|
Hardik Handa answered |
Wholesale price is different to retail price. The index number which measures the general price level in the wholesale price is called Wholesale Price Index (WPI).
Which of the following is correct with regard to the weighted price index?
(a) Weights are determined by the proportion of expenditure made on them in total expenditure during the base period.
(b) Current period weights are preferred over base year weight.- a)Only (a)
- b)Only (b)
- c)Both (a) and (b)
- d)Neither (a) nor (b)
Correct answer is option 'A'. Can you explain this answer?
Which of the following is correct with regard to the weighted price index?
(a) Weights are determined by the proportion of expenditure made on them in total expenditure during the base period.
(b) Current period weights are preferred over base year weight.
(a) Weights are determined by the proportion of expenditure made on them in total expenditure during the base period.
(b) Current period weights are preferred over base year weight.
a)
Only (a)
b)
Only (b)
c)
Both (a) and (b)
d)
Neither (a) nor (b)
|
Navya Sengupta answered |
Base period weights are preferred over current year weight. It is because calculating the weight every year is inconvenient.
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
Correct answer is option 'A'. Can you explain this answer?
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
|
Bhargavi Roy answered |
Purchasing power of money is the reciprocal of the price index number.
The purchasing power of money refers to the amount of goods and services that can be purchased with a given amount of money. It is essentially a measure of the value of money in terms of the goods and services it can buy. The price index number, on the other hand, is a measure of the average level of prices for a basket of goods and services in an economy.
Understanding the relationship between purchasing power and price index:
The purchasing power of money and the price index number are inversely related to each other. In other words, as the price index number increases, the purchasing power of money decreases, and vice versa. This relationship can be explained using the concept of inflation.
Inflation and its impact on purchasing power:
Inflation refers to the sustained increase in the general level of prices in an economy over a period of time. When there is inflation, the price index number rises as the prices of goods and services increase. As a result, the purchasing power of money decreases because the same amount of money can now buy fewer goods and services.
For example, let's say the price index number is 150, which means that the average price of goods and services has increased by 50% compared to the base period. If you had $100 in the base period, its purchasing power would now be reduced to $100/1.5 = $66.67. This means that you can now buy fewer goods and services with the same amount of money due to the increase in prices.
Purchasing power and the reciprocal of the price index number:
The reciprocal of the price index number provides a measure of the purchasing power of money. It is calculated by dividing 1 by the price index number. For example, if the price index number is 150, the reciprocal would be 1/1.5 = 0.67. This means that the purchasing power of money has decreased by 33% compared to the base period.
Therefore, the correct answer is option 'A', which states that the purchasing power of money is the reciprocal of the price index number.
The purchasing power of money refers to the amount of goods and services that can be purchased with a given amount of money. It is essentially a measure of the value of money in terms of the goods and services it can buy. The price index number, on the other hand, is a measure of the average level of prices for a basket of goods and services in an economy.
Understanding the relationship between purchasing power and price index:
The purchasing power of money and the price index number are inversely related to each other. In other words, as the price index number increases, the purchasing power of money decreases, and vice versa. This relationship can be explained using the concept of inflation.
Inflation and its impact on purchasing power:
Inflation refers to the sustained increase in the general level of prices in an economy over a period of time. When there is inflation, the price index number rises as the prices of goods and services increase. As a result, the purchasing power of money decreases because the same amount of money can now buy fewer goods and services.
For example, let's say the price index number is 150, which means that the average price of goods and services has increased by 50% compared to the base period. If you had $100 in the base period, its purchasing power would now be reduced to $100/1.5 = $66.67. This means that you can now buy fewer goods and services with the same amount of money due to the increase in prices.
Purchasing power and the reciprocal of the price index number:
The reciprocal of the price index number provides a measure of the purchasing power of money. It is calculated by dividing 1 by the price index number. For example, if the price index number is 150, the reciprocal would be 1/1.5 = 0.67. This means that the purchasing power of money has decreased by 33% compared to the base period.
Therefore, the correct answer is option 'A', which states that the purchasing power of money is the reciprocal of the price index number.
Chapter doubts & questions for Index Numbers - Economics Class 11 2025 is part of Commerce exam preparation. The chapters have been prepared according to the Commerce exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for Commerce 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
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