Index Numbers

The post is about McQs on Index Numbers Quiz with Answers. There are 20 multiple-choice questions covering index numbers, price index numbers, weighted index numbers, and chain-based methods. Let us start with MCQs on the Index Numbers Quiz.

MCQs on Index Numbers Quiz

• All values of equal importance are used in calculating an index, the index is called:
• The Basic types of index numbers are:
• The weights used in a quantity index are:
• A relative obtained by dividing the price in a given year price in the base year and expressed as a percentage is called:
• A relative obtained by dividing the price in a given year by the price in the proceeding year and expressed as a percentage is called:
• In simple price index numbers, the base period is
• In chain base methods the base period is:
• For calculating weighted index numbers, which of the following methods are useful quantities consumed in the base period as weight:
• $P_{on} = \frac{\Sigma p_n q_n}{\Sigma p_0 q_n}\times 100$ is the formula of:
• The time reversal test is satisfied by
• The index number for the base year is
• An index number that can serve many purposes is called
• The index numbers used to measure the changes in the price of commodities is called
• Consumer’s price index numbers are calculated by:
• The variation in two or more variables studied by the index is called:
• In Laspeyre’s Price Index, the quantities use weight related to
• Commodities subject to considerable price variations can best be measured by a
• The weights used in a quantity index are
• Theoretically best average used in the construction of a composite index is
• Which of the following price indices are prepared by the Federal Bureau of Statistics?

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The post is about MCQs index numbers. There are 20 multiple-choice questions related to the basics of index numbers, price relative, fixed base method, chain base methods, weighted index numbers, Paasche’s index numbers, Laspeyrs index numbers, and Fisher Idea index numbers. Let us start with the MCQs Index Numbers Quiz.

Please go to Important MCQs Index Numbers 1 to view the test

MCQs Index Numbers

• The index number that can be used for multi-purpose is:
• An index number computed for a single commodity is called
• The ———- index number has a wide scope
• The price relative formula is $\frac{?}{P0}\times 100$
• The index for the base period is always taken as
• In the fixed base method, the base period should be
• The commodities subject to considerable price variations can be best measured by
• In the chain base method, the base period is
• The chaining process used to make a comparison of the index number is
• Price relatives computed for the chain base method are called
• The most suitable average for index numbers is
• Index numbers are free from a unit of measurement because the index number shows
• Long-term variations are regarded as
• Paasche’s price index number is also called
• The index number having an upward bias is
• The index give by $\frac{\sum p_n q_n}{\sum p_0 q_0}\times 100$
• If Laspeyre’s index number is 200, and Paasche’s index number is 200 then the Fisher index number will be
• Increased demand for coolers in summer and heaters in winter is an example of
• The price used in the construction of consumer price index numbers is
• ——— method uses quantities consumed in the base period when computing a weighted index

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An index number in statistics is a tool used to track changes in a variable or a group of related variables, typically over time. Index Numbers condense the complex data into a single number (expressed as a percentage) for easier comparison between different periods or situations.

Example: A factory manager may wish to compare this month’s per-unit production cost with that of the past 6 months.

An index number measures how much a variable changes over time.

Simple Relatives Index Numbers

A simple relative is a ratio of the value of a variable in a given period to its value in the base (or reference) period.

If $x_0$ and $x_n$ are the values of a variable during the base period and a given period, respectively, then the simple relative, denoted by $x_{0n}$ is
$$x_{0n}=\frac{x_n}{x_0}$$

A relative is usually expressed as a percentage by multiplying by 100.

Simple Price Relative

If $p_0$ and $p_n$ are the prices of a commodity \texturdu{مفید شے، مال اسباب} during the base period and a given period, respectively, then the simple price relative, denoted by $p_{0n}$ is
$$p_{0n}=\frac{p_n}{p_0}$$
The price is generally defined as “money per unit quantity” and is usually taken as the average price for a period because the prices are not constant throughout a period.

Simple Quantity (Volume) Relative

If $q_0$ and $q_n$ are quantities of a commodity (produced, consumed, purchased, sold, exported, or imported, etc.) during the base period and a given period, respectively, then the simple quantity relative, denoted by $q_{0n}$ is
$$q_{0n}=\frac{q_n}{q_0}$$

Value

If $p$ is the price of a commodity and $q$ is its quantity during a period, then the value $v$ is given by $v=p\,q$. For example, if a quantity of 560kg of a commodity is purchased at the rate of Rs. 5 per Kg then
$$v=pq=5\times 560 = 2800$$

Simple Value Relative

If $v_0$ and $v_n$ are the values of a commodity during the base period and a given period, respectively, then the simple value relative, denoted by $v_{0n}$ is
$$v_{0n}=\frac{v_n}{v_0}=\frac{p_nq_n}{p_0q_0}=\frac{p_n}{q_n}\times \frac{q_n}{q_0}=p_{0n}\times q_{0n}$$

Uses of Index Number in Statistics

• Functions: Measure changes in variables like prices, production levels, or stock values.
• Benefits:
  • Simplifies complex data comparisons
  • Tracks trends over time
  • Provides a benchmark for analysis (often using a base period as a reference point at 100)
• Examples:
  • Consumer Price Index (CPI) tracks inflation by measuring changes in the prices of a basket of goods and services.
  • Stock market indices like the S&P 500 track the overall performance of a specific stock market section.

Note that there are various types of index numbers used for different purposes. Computing the index numbers involves specific formulas and functions that take into account the chosen base period and the way different variables are weighted within the index.

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This Post Contains Multiple Choice Questions from Introductory Statistics for the preparation of exams and different tests. This page includes the Online MCQs Based on Index Numbers for the preparation of different statistics and job-related examinations. Let us start with the MCQs based on Index Numbers, which is the first quiz on index numbers.

Online MCQs based on Index Numbers

	MCQS Index Numbers 05	MCQS Index Numbers 04
MCQS Index Numbers 03	MCQS Index Numbers 02	MCQS Index Numbers 01

Multiple Choice Questions about Index Number. The test about Index Numbers for the preparation of FPSC Statistical Officer will help you in online preparation for the post of Lecturer, Statistical Officer, and other statistics-related jobs.

• Construction of Index Numbers follows steps (i) Object of Index Number, (ii) Choice of items, (iii) Choice of Base Period, (iv) Collection of Prices of Items, (v) Choice of Average, (vi) Selection of Proper Weights
• Fixed Base Method
• Chain Base Method
• Composite Index Numbers
• Un-weighted index Numbers which include (i) Simple Aggregative Index Numbers, (ii) Simple Average of Relatives Index Numbers
• Weighted Index Numbers include (i) Weighted Aggregative Index Numbers, (ii) Weighted Average of Relatives Index Numbers
• The Weighted Aggregative Index Numbers include (i) Laspeyre’s Index Number, (ii) Paasche’s Index Number, (iii) Fisher Idea Index Number, Value Index Number,
• Consumer Price Index Numbers. The important steps in the construction of CPI numbers include (i) Choosing the class of people, (ii) Selection of commodities, (iii) Budget Inquiry, (iv) Collection of Prices, (v) Calculation of CPI Numbers

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