Which of the following is a use of index numbers? MCQ with Answer and Explanation

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Which of the following is a use of index numbers?

A. Measuring area

B. Measuring literacy

C. Measuring population growth

D. Measuring inflation

Answer: Option D

Solution (By JKSSB Mock Tests)

Index numbers are widely used to track changes in price levels, cost of living, etc.

This question belongs to: Accountancy and Statistics Statistics

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Question #1

Weighted index numbers are preferred over simple indices because they:

A. Do not require quantity data

B. Account for the relative importance of different items in the basket

C. Always satisfy the circular test

D. Are easier to calculate

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Correct Answer: Option B

Explanation:
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.

This question belongs to: Accountancy and Statistics Statistics

Question #2

Infant Mortality Rate (IMR) of 30 per 1,000 live births means:

A. 30 mothers die per 1,000 births

B. 3% of infants die before age 1

C. 30 out of every 1,000 newborns die before their first birthday

D. Life expectancy is 30 years

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Correct Answer: Option C

Explanation:
IMR = (Infant deaths / Live births) × 1,000. An IMR of 30 indicates 30 infant deaths per 1,000 live births, a key indicator of child health and healthcare system performance.

This question belongs to: Accountancy and Statistics Statistics

Question #3

Which index satisfies both time reversal and factor reversal tests?

A. Laspeyres

B. Fisher

C. Simple aggregative

D. Paasche

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Correct Answer: Option B

Explanation:
Only Fisher's ideal index satisfies both tests.

This question belongs to: Accountancy and Statistics Statistics

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