Which of the following index numbers suffers from upward bias? MCQ with Answer and Explanation

Question

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Which of the following index numbers suffers from upward bias?

A. Fisher's Index

B. Kelly's Index

C. Paasche's Index

D. Laspeyres' Index

Answer: Option D

Solution (By JKSSB Mock Tests)

Laspeyres uses base-year quantities, ignoring the substitution effect when prices rise, causing an upward bias in inflation estimates.

This question belongs to: Accountancy and Statistics Statistics

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Question #1

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A population has a very high proportion of young people. Its crude death rate may be low even if age-specific death rates are high because:

A. Migration of elderly lowers CDR.

B. It is due to statistical error.

C. Death rates are high at older ages, and few old people exist.

D. Young populations have higher immunity.

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Correct Answer: Option C

Explanation:
CDR is a weighted average of age-specific rates; with few elderly, the high mortality rates of old age receive less weight.

This question belongs to: Accountancy and Statistics Statistics

Question #2

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In a mail survey, which technique can help increase the response rate?

A. Eliminating follow-up reminders

B. Making the questionnaire extremely long

C. Providing a cover letter explaining the study's importance

D. Using complex wording

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Correct Answer: Option C

Explanation:
A well-written cover letter that explains the purpose and assures confidentiality can motivate respondents to participate.

This question belongs to: Accountancy and Statistics Statistics

Question #3

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The Fisher index is also known as:

A. Cost index

B. Ideal index

C. Chain index

D. Simple index

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Correct Answer: Option B

Explanation:
Fisher termed his index 'ideal' because it satisfies time reversal and factor reversal tests.

This question belongs to: Accountancy and Statistics Statistics

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