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CA Foundation Exam > CA Foundation Tests > Test: Index Numbers- 6 - CA Foundation MCQ

Test: Index Numbers- 6 - CA Foundation MCQ

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30 Questions MCQ Test - Test: Index Numbers- 6

Test: Index Numbers- 6 for CA Foundation 2024 is part of CA Foundation preparation. The Test: Index Numbers- 6 questions and answers have been prepared according to the CA Foundation exam syllabus.The Test: Index Numbers- 6 MCQs are made for CA Foundation 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Index Numbers- 6 below.

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Test: Index Numbers- 6 - Question 1

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With regard to Laspeyre and Paasche price index numbers, it is maintained that If the Prices of all the goods change in the same ratio, the two indices will be equal for them the weighting system is irrelevant; or if the quantities of all the goods change in the same ratio, they will be equal, for them the two weighting systems are the same relatively. Then the above statements satisfy.

A.
Laspeyre Price index ≠ Paasche Price Index.
B.
Laspeyre Price Index = Paasche Price Index.
C.
Laspeyre Price Index may be equal Paasche Price Index.
D.
None of these.

Test: Index Numbers- 6 - Question 2

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Circular Test is satisfied by

A.
Laspeyre Index number.
B.
Paasche index number.
C.
The simple geometric mean of price relatives and the weighted aggregative with fixed weights.
D.
None of these.

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Test: Index Numbers- 6 - Question 3

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The price level of a country in a certain year has increased 25% over the base period. The index number is

A.
25
B.
125
C.
225
D.
2500

Test: Index Numbers- 6 - Question 4

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If the ratio between Laspeyre index number and Paasche Index number is 28:27. Then the missing figure in the following table P is:

A.
7
B.
4
C.
3
D.
9

Test: Index Numbers- 6 - Question 5

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Paasche index is based on

A.
Base year quantities
B.
Current year quantities.
C.
Average of current and base year.
D.
None of these.

Test: Index Numbers- 6 - Question 6

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Fisher ideal index number is

A.
The Median of Laspeyre and Paasche index numbers
B.
The Arithmetic Mean of Laspeyre and Paasche index numbers
C.
The Geometric Mean of Laspeyre and Paasche index numbers
D.
None of these

Test: Index Numbers- 6 - Question 7

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Time reversal Test is satisfied by following index number formula is

A.
Laspeyre Index number.
B.
Simple Arithmetic Mean of price relative formula
C.
Marshall -Edge worth formula.
D.
None of these.

Test: Index Numbers- 6 - Question 8

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If the index number of prices at a place in 1994 is 250 with 1984 as base year, then the prices have increased on average by

A.
250%
B.
150%
C.
350%
D.
None of these.

Test: Index Numbers- 6 - Question 9

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The factor reversal test is satisfied by

A.
Simple aggregative index number.
B.
Paasche index number.
C.
Laspeyre index number.
D.
None of these.

Test: Index Numbers- 6 - Question 10

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Fisher index number is based on

A.
The Arithmetic mean of Laspeyre and Paasche index numbers
B.
The Median of Laspeyre and Paasche index numbers.
C.
The Mode of Laspeyre nad Paasche index numbers.
D.
None of these.

Test: Index Numbers- 6 - Question 11

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The circular test is satisfied by

A.
Fisher index number.
B.
Paasche index number.
C.
Laspeyre index number.
D.
None of these.

Test: Index Numbers- 6 - Question 12

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If the prices of all commodities in a place have increased 1.25 times in comparison to the base period, the index number of prices of that place now is

A.
125
B.
150
C.
225
D.
None of these.

Test: Index Numbers- 6 - Question 13

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If the prices of all commodities in a place have decreased 35% over the base period prices, then the index number of prices of that place is now

A.
35
B.
135
C.
65
D.
None of these.

Test: Index Numbers- 6 - Question 14

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The time reversal test is satisfied by

A.
Fisher index number.
B.
Paasche index number.
C.
Laspeyre index number.
D.
None of these.

Test: Index Numbers- 6 - Question 15

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The best average for constructing an index numbers is

A.
Arithmetic Mean
B.
Harmonic Mean
C.
Geometric Mean
D.
None of these.

Test: Index Numbers- 6 - Question 16

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Simple aggregate of quantities is a type of

A.
Quantity control
B.
Quantity indices
C.
Both
D.
None

Test: Index Numbers- 6 - Question 17

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Theoretically, G.M. is the best average in the construction of index numbers. but in practise, mostly the A.M. is used

A.
False
B.
True
C.
Both
D.
None

Test: Index Numbers- 6 - Question 18

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Laspeyre or Paasche or the Fisher ideal index do not satisfy

A.
Time Reversal Test
B.
Unit Test
C.
Circular Test
D.
None

Test: Index Numbers- 6 - Question 19

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Fisher Ideal Formula does not satisfy _________test

A.
Unit Test
B.
Circular test
C.
Time Reversal Test
D.
None

Test: Index Numbers- 6 - Question 20

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Laspeyre and Paasche method _________time reversal test

A.
Satify
B.
Do not satisfy
C.
Are
D.
Are not

Test: Index Numbers- 6 - Question 21

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The number of test of Adequacy is

A.
2
B.
5
C.
3
D.
4

Test: Index Numbers- 6 - Question 22

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There is no such thing as unweighted index numbers

A.
False
B.
True
C.
Both
D.
None

Test: Index Numbers- 6 - Question 23

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The test of shifting the base is called

A.
Unit Test
B.
Time Reversal Test
C.
Circular Test
D.
None

Test: Index Numbers- 6 - Question 24

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Each of the following statements is either True or False. Write your choice of the answer by writing F for false.

A.
Geometric mean is the most appropriate average to be used for constructing an index number.
B.
Weighted average of relatives and weighted aggregative methods render the same result.
C.
Fisher Ideal Index Number is a comprise between two well known indices - not a right compromise, economically speaking.
D.
Like all statistical tools, index numbers must be used with great caution.

Test: Index Numbers- 6 - Question 25

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_______________is concerned with the measurement of price changes over a period of years, when it is desirable to shift the base

A.
Unit Test
B.
Circular test
C.
Time Reversal Test
D.
None

Test: Index Numbers- 6 - Question 26

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We use price index numbers

A.
To measure and compare prices
B.
To measure prices
C.
To compare prices
D.
None

Test: Index Numbers- 6 - Question 27

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Each of the following statements is either True or False write your choice of the answer by writing T for True

A.
Index Numbers are the sign and guideposts along the buisness highway that indicate to the businessman how he should drive or manage.
B.
For Construction index number, the best method on theoretical ground is not the best method from practical point of view.
C.
Weighting index numbers makes them less representative.
D.
Fisher index number is not an ideal index number.

Test: Index Numbers- 6 - Question 28

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________________satisfies circular test

A.
G.M. of price or the weighted aggregate with fixed weights
B.
A.M. of price relatives or the weighted aggregate with fixed weights
C.
H.M. of price relatives or the weighted aggregate with fixed weights
D.
None

Test: Index Numbers- 6 - Question 29

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The ratio of price of single commodity in a given period to its price in another period is called the

A.
Base period
B.
Price ratio
C.
Relative price
D.
None

Detailed Solution for Test: Index Numbers- 6 - Question 29

Option (a) base period is right answer.

Explanation:-

Base period or reference period refers to the period of time used as the basis for an index number, for comparison with other periods

Test: Index Numbers- 6 - Question 30

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When the product of price index and the quantity index is equal to the corresponding value index then the test that holds is

A.
Unit Test
B.
Time Reversal Test
C.
Factor Reversal Test
D.
None holds

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