The wholesale price index in India is a: MCQ with Answer and Explanation

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The wholesale price index in India is a:

A. Cost of living index

B. Consumer price index

C. Price index for goods traded at the wholesale level

D. Index of industrial production

Answer: Option C

Solution (By JKSSB Mock Tests)

WPI measures wholesale price movements of goods.

This question belongs to: Accountancy and Statistics Statistics

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Question #1

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If the Laspeyres price index for a commodity basket is 140 and the Paasche is 135, Fisher's index is:

A. 137.47

B. 135

C. 137.5

D. 140

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Correct Answer: Option A

Explanation:
√(140×135) = √18900 ≈ 137.477.

This question belongs to: Accountancy and Statistics Statistics

Question #2

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Which index number formula satisfies the circular test?

A. Laspeyres index

B. Fisher index

C. Simple geometric mean of price relatives with fixed base

D. Paasche index

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Correct Answer: Option C

Explanation:
Fixed base simple geometric mean of relatives satisfies circular test; L, P, F do not.

This question belongs to: Accountancy and Statistics Statistics

Question #3

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The 'bias' in Laspeyres and Paasche price indices is that:

A. Both understate

B. Laspeyres tends to overstate price increase, Paasche understates

C. Both overstate

D. Laspeyres understates, Paasche overstates

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Correct Answer: Option B

Explanation:
Laspeyres uses base period basket, ignoring substitution, so it overstates; Paasche uses current basket, often understating.

This question belongs to: Accountancy and Statistics Statistics

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