Paasche price index is calculated as: MCQ with Answer and Explanation

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Paasche price index is calculated as:

A. Σ(p₁q₁)/Σ(p₀q₁) × 100

B. √[Σ(p₁q₀)/Σ(p₀q₀) × Σ(p₁q₁)/Σ(p₀q₁)] × 100

C. Σ(p₁q₀)/Σ(p₀q₀) × 100

D. Σ(p₁q₁)/Σ(p₀q₀) × 100

Answer: Option A

Solution (By JKSSB Mock Tests)

Paasche index = Σ(p₁q₁)/Σ(p₀q₁) × 100, using current period quantities (q₁) as weights, which may understate inflation due to substitution effects but reflects current consumption patterns.

This question belongs to: Accountancy and Statistics Statistics

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Practice More Statistics Questions

Question #1

If the arithmetic mean of a sample is 20 and median is 22, the distribution is likely:

A. Symmetric

B. Negatively skewed

C. Positively skewed

D. Normal

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Correct Answer: Option B

Explanation:
Mean < Median suggests negative skewness (left-skewed).

This question belongs to: Accountancy and Statistics Statistics

Question #2

If the mean of a distribution is 30 and the mode is 24, the distribution is:

A. Negatively skewed

B. Platykurtic

C. Symmetric

D. Positively skewed

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Correct Answer: Option D

Explanation:
Mean > Mode implies positive skewness.

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Question #3

The simple aggregative price index is:

A. Σp₁ / Σp₀ × 100

B. Σp₁q₀ / Σp₀q₀ × 100

C. Σp₁q₁ / Σp₀q₁ × 100

D. √(L×P) × 100

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Correct Answer: Option A

Explanation:
Simple aggregative index sums current prices, divides by sum of base prices, and multiplies by 100.

This question belongs to: Accountancy and Statistics Statistics

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