The Paasche price index tends to ______ the true increase in prices if consumers substitute away from goods that have become more expensive. MCQ with Answer and Explanation

Question

The Paasche price index tends to ______ the true increase in prices if consumers substitute away from goods that have become more expensive.

A. Not measure

B. Overstate

C. Understate

D. Exactly measure

Answer: Option C

Solution (By JKSSB Mock Tests)

Paasche uses current period quantities; substitution away from expensive items reduces their weight, leading to understatement.

This question belongs to: Accountancy and Statistics Statistics

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Gross Reproduction Rate (GRR) is calculated as TFR multiplied by:

A. Proportion of female births

B. Inverse of sex ratio

C. Proportion of male births

D. Life expectancy at birth

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Correct Answer: Option A

Explanation:
GRR = TFR × (female births / total births), representing the average number of daughters a woman would have.

This question belongs to: Accountancy and Statistics Statistics

Question #2

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The perinatal mortality rate includes:

A. Deaths from 1 month to 1 year

B. Stillbirths and deaths in first week of life

C. Maternal deaths during childbirth

D. All infant deaths under one year

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Correct Answer: Option B

Explanation:
Perinatal period = 28 weeks gestation to 7 days after birth.

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Question #3

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If P(A)=0.5, P(B)=0.3, and A, B are mutually exclusive, then P(A∪B) is:

A. 0.2

B. 0.8

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Correct Answer: Option B

Explanation:
0.5+0.3=0.8.

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