Which index number formula satisfies the circular test? MCQ with Answer and Explanation

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Which index number formula satisfies the circular test?

A. Simple geometric mean of price relatives with fixed base

B. Laspeyres index

C. Paasche index

D. Fisher index

Answer: Option A

Solution (By JKSSB Mock Tests)

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

This question belongs to: Accountancy and Statistics Statistics

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Question #1

The schedule is preferred when:

A. The budget is extremely low

B. The area is very small

C. The respondents are highly educated

D. The respondents are illiterate and data accuracy is important

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Correct Answer: Option D

Explanation:
Enumerators can explain and record answers, ensuring good quality data from illiterate respondents.

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Question #2

Life expectancy at birth is computed using:

A. Life table

B. Birth registration

C. Sample survey

D. Census only

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Correct Answer: Option A

Explanation:
Life table synthesizes age-specific mortality rates to compute life expectancy.

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Question #3

Direct standardization is preferred over indirect when:

A. Comparing more than two populations

B. Age-specific rates for the study population are unstable due to small numbers

C. Age-specific rates for the study population are reliable and available

D. Only total deaths are known

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Correct Answer: Option C

Explanation:
Direct standardization requires stable age-specific rates for the study group; if these are unreliable (e.g., small areas), indirect standardization (using standard rates) is more appropriate.

This question belongs to: Accountancy and Statistics Statistics

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