Paasche's Price Index uses: MCQ with Answer and Explanation

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Paasche's Price Index uses:

A. Average of base and current year quantities

B. Base year quantities as weights

C. Current year quantities as weights

D. Fixed arbitrary weights

Answer: Option C

Solution (By JKSSB Mock Tests)

Paasche uses current year quantities, which makes it reflective of current consumption patterns but suffers from downward bias.

This question belongs to: Accountancy and Statistics Statistics

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Question #1

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In a frequency distribution, if the mean is 50, median is 48, and mode is 45, the distribution is likely:

A. Negatively skewed

B. Positively skewed

C. Symmetrical

D. Bimodal

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Correct Answer: Option B

Explanation:
In a positively skewed distribution, mean > median > mode due to the pull of extreme high values; here, 50 > 48 > 45 aligns with this pattern, indicating right-skewness.

This question belongs to: Accountancy and Statistics Statistics

Question #2

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The weighted mean of 4, 6, 8 with weights 1, 2, 3 respectively is:

A. 7

B. 6

C. 8

D. 6.67

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Correct Answer: Option D

Explanation:
Weighted sum = 4×1+6×2+8×3 = 4+12+24=40. Sum of weights=6. Mean=40/6≈6.67.

This question belongs to: Accountancy and Statistics Statistics

Question #3

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The sum of deviations of all values from the median is minimized when measured in:

A. Absolute deviations

B. Cubed deviations

C. Relative deviations

D. Squared deviations

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Correct Answer: Option A

Explanation:
Median minimizes sum of absolute deviations.

This question belongs to: Accountancy and Statistics Statistics

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