Test: Index Numbers- 6 - CA Foundation MCQ

Laspeyre Price index ≠ Paasche Price Index.

Laspeyre Price Index = Paasche Price Index.

Laspeyre Price Index may be equal Paasche Price Index.

None of these.

Laspeyre Index number.

Paasche index number.

The simple geometric mean of price relatives and the weighted aggregative with fixed weights.

None of these.

25

125

225

2500

7

4

3

9

Base year quantities

Current year quantities.

Average of current and base year.

None of these.

The Median of Laspeyre and Paasche index numbers

The Arithmetic Mean of Laspeyre and Paasche index numbers

The Geometric Mean of Laspeyre and Paasche index numbers

None of these

Laspeyre Index number.

Simple Arithmetic Mean of price relative formula

Marshall -Edge worth formula.

None of these.

250%

150%

350%

None of these.

Simple aggregative index number.

Paasche index number.

Laspeyre index number.

None of these.

The Arithmetic mean of Laspeyre and Paasche index numbers

The Median of Laspeyre and Paasche index numbers.

The Mode of Laspeyre nad Paasche index numbers.

None of these.

Fisher index number.

Paasche index number.

Laspeyre index number.

None of these.

125

150

225

None of these.

35

135

65

None of these.

Fisher index number.

Paasche index number.

Laspeyre index number.

None of these.

Arithmetic Mean 

Harmonic Mean 

Geometric Mean 

None of these.

Quantity control

Quantity indices

Both

None

False

True

Both

None

Time Reversal Test

Unit Test

Circular Test

None

Unit Test

Circular test

Time Reversal Test

None

Satify

Do not satisfy

Are

Are not

2

5

3

4

False

True

Both

None

Unit Test

Time Reversal Test

Circular Test

None

Geometric mean is the most appropriate average to be used for constructing an index number.

Weighted average of relatives and weighted aggregative methods render the same result.

Fisher Ideal Index Number is a comprise between two well known indices - not a right compromise, economically speaking.

Like all statistical tools, index numbers must be used with great caution.

Unit Test

Circular test

Time Reversal Test

None

To measure and compare prices

To measure prices

To compare prices

None

Index Numbers are the sign and guideposts along the buisness highway that indicate to the businessman how he should drive or manage. 

For Construction index number, the best method on theoretical ground is not the best method from practical point of view.

Weighting index numbers makes them less representative.

Fisher index number is not an ideal index number.

G.M. of price or the weighted aggregate with fixed weights

A.M. of price relatives or the weighted aggregate with fixed weights

H.M. of price relatives or the weighted aggregate with fixed weights

None

Base period

Price ratio

Relative price

None

Unit Test

Time Reversal Test

Factor Reversal Test

None holds