Free Index Numbers and Time Series MCQs with Answers

• A. Aggregate index numbers
• B. Weighted index numbers
• C. Weighted price index only
• D. Weighted quantity index only

Explanation: Laspeyres and Paasche indices use weights, usually quantities from the base or current period, so both belong to weighted index numbers. They are not limited only to price or quantity indices because the general classification is weighted indices.

• A. Ignores relative quantities
• B. Compares relative quantities to relative prices
• C. Compares absolute prices to absolute quantities
• D. Compares relative quantities

Explanation: A simple aggregate price index is calculated from the sum of current prices divided by the sum of base-period prices, multiplied by 100. Since no quantities appear in this formula, it ignores relative quantities.

• A. Price decrease
• B. Price absolute
• C. Price increase
• D. Price relative

Explanation: A price relative compares a commodity's price in the new period with its price in the base period, usually written as Pn/Po × 100. It measures the percentage level of the new price relative to the base price.

• A. 100
• B. 200
• C. The price of that year
• D. None of these

Explanation: The base period is assigned an index value of 100 by convention, and all other period values are interpreted relative to it. The actual base-year price is not itself the index number.

• A. ∑pn/∑po x100
• B. pn/po x100
• C. pn/pn-1 x100
• D. Both (a) and (b) but not (c)

Explanation: A chain index compares each period with the immediately preceding period, so its link relative is Pn/Pn−1 × 100. Comparing every period directly with one fixed base gives a fixed-base index instead.

• A. Fixed
• B. Constant
• C. Change
• D. None of these

Explanation: In the chain-base method, the reference period changes from one link to the next, so each period is compared with the preceding period. This differs from the fixed-base method, where the base remains constant.

• A. Science
• B. Education
• C. Intelligence
• D. Business

Explanation: Index numbers summarize changes in prices, quantities, or values and are widely used in economics and business for comparison and decision-making. Science and education may use statistics, but business is the standard paired field here.

• A. variable
• B. Region of goods
• C. Device
• D. CostPolitical Science Mcqs

Explanation: An index number is a statistical device for measuring changes in a variable or a group of related variables over time. The wording is slightly corrupted, but “Device” gives the intended definition.

• A. Simple 1. No.
• B. Aggregative 1. No.
• C. Appropriate
• D. Quantity Index Number

Explanation: A quantity index number measures changes in the physical quantities of goods, such as units produced or sold. A price index instead measures changes in prices, so the quantity-based option is appropriate.

• A. Fixed Method
• B. Chain Method
• C. Aggregation Method
• D. Volume

Explanation: In the chain-base method, each period is compared with the immediately preceding period, so the preceding year’s price is used. A fixed-base method compares every period with one constant base year.