Index Numbers Multiple Choice Questions and answers (mcqs)

 1- The formula of  link relatives is:

(A) Pn/Pn-1 * 100 (B) Pn/Po * 100

Option (A) is correct.

Note: Formula of Price relative is : Pn/Po * 100.

Formula of Quantity relative is : Qn/Qo * 100.

Pn is the price of current year & Po is the price of base year.

2- In Fix-Base Method, we calculate:

(A) Price Relatives (B) Quantity Relatives

Option (A) is correct.

Note: But, In Chain-Base Method , we calculate Link Relatives and then make chain indices.

3- Index number for base period is always taken as:

(A) 200 (B) 100

Option (B) is correct.

4- The formula of Fisher's 'Ideal' Price Index is:

(A) Pon = Square Root of L * P (B) Pon = L * P

Option (A) is correct.

Note: L shows Laspeyre's Price Index and P shows Paasche's Price Index.

5- Value Relative =:

(A) Price Relative * Quantity Relative (B) Nothing

Option (A) is correct.

6- In Time-Reversal Test, Pon * Pno =:

(A) 2 (B) 1

Option (B) is correct.

7- In Tests of Index numbers , we neglect the factor:?

(A) 100 (B) 300

Option (A) is correct.

8- In Factor- Reversal Test, Price Index * Quantity Index = :?

(A) Weighted Index (B) Value Index

Option (B) is correct.

9- Only Fisher's Index satisfies:

(A) Factor Reversal Test (B) Circular Test

Option (A) is correct.

10- In Circular Test, Pab * Pbc * Pca = :?

(A) 100 (B) 1

Option (B) is correct.

best of luck!

Follow on my Facebook ID: Muhammad Asad Muhammad Irshad

Follow on my YouTube Channel: Asad International Academy

More Multiple Choice Questions and answers are available here!

<script data-ad-client="ca-pub-8588704649339395" async src="https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js"></script>