Weighted index numbers are preferred over simple indices because they: MCQ with Answer and Explanation

Weighted index numbers are preferred over simple indices because they:
A. Account for the relative importance of different items in the basket
B. Are easier to calculate
C. Always satisfy the circular test
D. Do not require quantity data
Answer: Option A
Solution (By JKSSB Mock Tests)
Weighted indices assign weights (e.g., expenditure shares) to reflect the economic significance of items, providing a more realistic measure of overall change than simple indices that treat all items equally.

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Practice More Statistics Questions

Question #1
If the price index is 125 and the quantity index is 120, the value index is:
A. 125
B. 150
C. 130
D. 145

Correct Answer: Option B


Explanation:
Value ratio = price ratio × quantity ratio. In index form (decimal), 1.25 × 1.20 = 1.50, i.e., 150.

This question belongs to: Accountancy and Statistics Statistics
Question #2
Fisher's ideal index is called 'ideal' primarily because it:
A. Satisfies both time reversal and factor reversal tests
B. Ignores quantity changes
C. Is the easiest to calculate
D. Uses only current period data

Correct Answer: Option A


Explanation:
Fisher's index earns the 'ideal' label by mathematically satisfying two key consistency tests (time reversal and factor reversal), ensuring logical coherence in index number construction.

This question belongs to: Accountancy and Statistics Statistics
Question #3
For perfect positive association between attributes A and B, we expect:
A. (Aβ) = 0
B. (AB) = 0
C. Both (Aβ) and (αB) = 0
D. (αB) = 0

Correct Answer: Option C


Explanation:
Perfect positive association means all A's are B's and all B's are A's, so no A without B and no B without A.

This question belongs to: Accountancy and Statistics Statistics