The Laspeyres quantity index uses: MCQ with Answer and Explanation

Question
The Laspeyres quantity index uses:
A. Base period prices as weights
B. Current period quantities as weights
C. Base period quantities as weights
D. Current period prices as weights
Answer: Option A
Solution (By JKSSB Mock Tests)
Laspeyres quantity index = Σp₀q₁ / Σp₀q₀ × 100.
This question belongs to: Accountancy and Statistics Statistics
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Practice More Statistics Questions

Question #1
Which property of the arithmetic mean states that the sum of deviations from the mean is always zero?
A. Invariance under change of origin
B. Linearity
C. Minimum sum of squared deviations
D. Sum of deviations property
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Correct Answer: Option D

Explanation:
The sum of deviations of all observations from their arithmetic mean is always zero, i.e., Σ(x - x̄) = 0, which is a fundamental algebraic property of the mean.
This question belongs to: Accountancy and Statistics Statistics
Question #2
Which of the following is a use of index numbers?
A. Measuring inflation
B. Measuring area
C. Measuring population growth
D. Measuring literacy
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Correct Answer: Option A

Explanation:
Index numbers are widely used to track changes in price levels, cost of living, etc.
This question belongs to: Accountancy and Statistics Statistics
Question #3
If the price index rises from 100 to 120, the purchasing power of money:
A. Decreases by 16.67%
B. Decreases by 20%
C. Remains unchanged
D. Increases by 20%
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Correct Answer: Option A

Explanation:
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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