The Paasche index is likely to understate price rise because: MCQ with Answer and Explanation

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The Paasche index is likely to understate price rise because:

A. It uses base year quantities

B. It is unweighted

C. It uses current year quantities, reflecting substitution

D. It uses geometric mean

Answer: Option C

Solution (By JKSSB Mock Tests)

Substitution away from goods whose prices rose relatively reduces their weight, leading to underestimation.

This question belongs to: Accountancy and Statistics Statistics

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Practice More Statistics Questions

Question #1

In a 2×2 table, if (AB)=100, (Aβ)=150, (αB)=200, (αβ)=250, the total N is:

A. 800

B. 700

C. 900

D. 600

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Correct Answer: Option B

Explanation:
N = sum of all ultimate class frequencies = 100 + 150 + 200 + 250 = 700. This is the total population classified by the two attributes.

This question belongs to: Accountancy and Statistics Statistics

Question #2

Vital statistics primarily deal with demographic events such as:

A. Income and expenditure

B. Export and import

C. Employment and inflation

D. Births, deaths, and marriages

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Correct Answer: Option D

Explanation:
Vital statistics are data relating to life events, primarily births, deaths, marriages, and divorces in a population.

This question belongs to: Accountancy and Statistics Statistics

Question #3

The denominator for Perinatal Mortality Rate includes:

A. Total births (live births + stillbirths)

B. Total live births only

C. Total population

D. Women of reproductive age

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Correct Answer: Option A

Explanation:
PNMR = (stillbirths + early neonatal deaths) / (live births + stillbirths) × 1000.

This question belongs to: Accountancy and Statistics Statistics

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