If the price index rises from 100 to 120, the purchasing power of money: MCQ with Answer and Explanation

Question
If the price index rises from 100 to 120, the purchasing power of money:
A. Decreases by 20%
B. Decreases by 16.67%
C. Remains unchanged
D. Increases by 20%
Answer: Option B
Solution (By JKSSB Mock Tests)
Purchasing power = 1/price index. Old: 1/100=0.01, new: 1/120≈0.00833, decline = (0.01-0.00833)/0.01 = 0.1667 or 16.67%.
This question belongs to: Accountancy and Statistics Statistics
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Practice More Statistics Questions

Question #1
Which of the following is a potential limitation of secondary data?
A. It cannot be used for statistical analysis
B. It requires ethical clearance for every use
C. It is always outdated
D. It may not align perfectly with the current research objectives
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Correct Answer: Option D

Explanation:
Secondary data was collected for a different purpose, so it may lack relevance, specificity, or compatibility with the current study's requirements, necessitating careful evaluation.
This question belongs to: Accountancy and Statistics Statistics
Question #2
Wholesale Price Index (WPI) is more sensitive to changes in:
A. Primary and manufactured goods prices
B. Housing rents
C. Imported luxury goods
D. Service sector prices
Discuss
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Correct Answer: Option A

Explanation:
WPI primarily tracks prices of goods (primary articles, fuel, manufactured products) at wholesale stages, with limited service coverage, making it more responsive to commodity price fluctuations.
This question belongs to: Accountancy and Statistics Statistics
Question #3
In a 2×2 contingency table, if ad > bc, then:
A. Data are inconsistent
B. A and B are positively associated
C. A and B are negatively associated
D. A and B are independent
Discuss
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Correct Answer: Option B

Explanation:
ad > bc indicates positive association.
This question belongs to: Accountancy and Statistics Statistics
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