The Laspeyres quantity index uses: MCQ with Answer and Explanation

Question

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The Laspeyres quantity index uses:

A. Base period prices as weights

B. Current period quantities as weights

C. Current period prices as weights

D. Base period quantities 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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Question #1

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The harmonic mean is the reciprocal of the arithmetic mean of:

A. Reciprocals of the observations

B. Squares of observations

C. The observations themselves

D. Square roots of observations

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Correct Answer: Option A

Explanation:
HM = 1 / [ (1/n) Σ (1/x_i) ].

This question belongs to: Accountancy and Statistics Statistics

Question #2

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The harmonic mean is most appropriate for averaging:

A. Speeds when the distance is constant

B. Growth rates

C. Income

D. Ratings

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Correct Answer: Option A

Explanation:
Harmonic mean is used for rates where the numerator is constant, such as average speed for fixed distances.

This question belongs to: Accountancy and Statistics Statistics

Question #3

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Fisher's ideal index satisfies the factor reversal test because:

A. Its price and quantity index product equals the value index

B. It ignores quantity changes

C. It uses base period weights

D. It is the arithmetic mean of Laspeyres and Paasche

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Correct Answer: Option A

Explanation:
Fisher's index is designed so that (Fisher price index) × (Fisher quantity index) = Σp₁q₁/Σp₀q₀ (value index), fulfilling the factor reversal test for consistency between price and quantity measures.

This question belongs to: Accountancy and Statistics Statistics

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