In the construction of Index Numbers, Geometric Mean is considered better than Arithmetic Mean because: MCQ with Answer and Explanation

In the construction of Index Numbers, Geometric Mean is considered better than Arithmetic Mean because:
A. It is easier to calculate
B. It gives equal weight to equal percentage changes
C. It fails the time reversal test
D. It ignores zero values
Answer: Option B
Solution (By JKSSB Mock Tests)
GM balances out massive price swings better than AM because it treats a doubling (200%) and a halving (50%) equally.

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Practice More Statistics Questions

Question #1
If P(A) = 0.4, P(B) = 0.5, and A and B are independent events, what is P(A ∪ B)?
A. 0.7
B. 0.2
C. 0.9
D. 0.1

Correct Answer: Option A


Explanation:
For independent events, P(A ∩ B) = 0.4 × 0.5 = 0.2. Using the addition theorem: P(A ∪ B) = 0.4 + 0.5 - 0.2 = 0.7.

This question belongs to: Accountancy and Statistics Statistics
Question #2
If a questionnaire has a question: 'Don't you think the government should increase spending on education and health?' This is an example of:
A. Open-ended question
B. Double-barreled question
C. Leading question
D. Filter question

Correct Answer: Option B


Explanation:
It asks about two issues (education and health) simultaneously, and also has a leading tone, but primarily double-barreled because it combines two spending areas.

This question belongs to: Accountancy and Statistics Statistics
Question #3
The median of the dataset: 10, 15, 20, 25, 30, 35 is:
A. 20
B. 30
C. 25
D. 22.5

Correct Answer: Option D


Explanation:
With 6 observations (even), median = average of 3rd and 4th values in ordered list: (20 + 25)/2 = 22.5. This splits the data into two equal halves.

This question belongs to: Accountancy and Statistics Statistics