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Test: Index Numbers- 2

40 Questions MCQ Test Business Mathematics and Logical
Reasoning & Statistics | Test: Index Numbers- 2

Description
This mock test of Test: Index Numbers- 2 for CA Foundation helps
you for every CA Foundation entrance exam. This contains 40
Multiple Choice Questions for CA Foundation Test: Index Numbers-
2 (mcq) to study with solutions a complete question bank. The
solved questions answers in this Test: Index Numbers- 2 quiz give
you a good mix of easy questions and tough questions. CA
Foundation students definitely take this Test: Index Numbers- 2
exercise for a better result in the exam. You can find other Test:
Index Numbers- 2 extra questions, long questions & short
questions for CA Foundation on EduRev as well by searching
above.
QUESTION: 1

A. True

B. false
 C. both

D. none

Solution:

QUESTION: 2

The no. of test of Adequacy is

A. 2

B. 5

C. 3

D. 4

Solution:

QUESTION: 3

Simple aggregate of quantities is a type of

A. Quantity control

B. Quantity indices

C. both

D. none

Solution:
QUESTION: 4

We use price index numbers

A. To measure and compare prices

B. to measure prices

C. to compare prices

D. none

Solution:

QUESTION: 5

Each of the following statements is either True or False write your

choice of the answer by writing T for True

A. Index Numbers are the signs and guideposts along the business highway that
indicate to the businessman how he should drive or manage.

B. “For Construction index number. The best method on theoretical ground is not
the best method from practical point of view”.

C. Weighting index numbers makes them less representative.

D. Fisher’s index number is not an ideal index number.

Solution:

QUESTION: 6

Each of the following statements is either True or False. Write your

choice of the answer by writing F for false.

A. Geometric mean is the most appropriate average to be used for constructing an

index number.
 B. Weighted average of relatives and weighted aggregative methods render the
same result.

C. “Fisher’s Ideal Index Number is a compromise between two well known indices –
not a right compromise, economically speaking”.

D. “Like all statistical tools, index numbers must be used with great caution”.

Solution:

QUESTION: 7

The best average for constructing an index numbers is

A. Arithmetic Mean

B. Harmonic Mean

C. Geometric Mean

D. None of these

Solution:

QUESTION: 8

The time reversal test is satisfied by

A. Fisher’s index number.

B. Paasche’s index number.

C. Laspeyre’s index number.

D. None of these.

Solution:
QUESTION: 9

The factor reversal test is satisfied by

A. Simple aggregative index number.

B. Paasche’s index number.

C. Laspeyre’s index number.

D. None of these.

Solution:

QUESTION: 10

The circular test is satisfied by

A. Fisher’s index number.

B. Paasche’s index number.

C. Laspeyre’s index number.

D. None of these.

Solution:

QUESTION: 11

Fisher’s index number is based on

A. The Arithmetic mean of Laspeyre’s and Paasche’s index numbers.

B. The Median of Laspeyre’s and Paasche’s index numbers.

C. The Mode of Laspeyre’s and Paasche’s index numbers.

 D. None of these.

Solution:

QUESTION: 12

Paasche index is based on

A. Base year quantities.

B. Current year quantities.

C. Average of current and base year.

D. None of these.

Solution:

QUESTION: 13

Fisher’s ideal index number is

A. The Median of Laspeyre’s and Paasche’s index number

B. The Arithmetic Mean of Laspeyre’s and Paasche’s.

C. The Geometric Mean of Laspeyre’s and Paasche’s

D. None of these.

Solution:

QUESTION: 14

Price-relative is expressed in term of

A.
 B.

C.

D.

Solution:

QUESTION: 15

Paasehe’s index number is expressed in terms of :

A.

B.

C.

D.

Solution:

QUESTION: 16

Time reversal Test is satisfied by following index number formula is

A. Laspeyre’s Index number.

 B. Simple Arithmetic Mean of price relative formula

C. Marshall-Edge worth formula.

D. None of these.

Solution:

QUESTION: 17

Cost of living Index number (C. L. I.) is expressed in terms of :

A.

B.

C.

D. None of these

Solution:

QUESTION: 18

If the ratio between Laspeyre’s index number Paasche’s Index number

is 28 : 27. Then the Missing figure in the following table P is :

A. 7

B. 4
 C. 3

D. 9

Solution:

QUESTION: 19

If the prices of all commodities in a place have increased 1.25 times

in comparison to the base period, the index number of prices of that
place is now

A. 125

B. 150

C. 225

D. None of these

Solution:
According to the question,  Given : P1 = P0 + 1.25 P0
P1  = 2.25 P0
In index numbers, we assume base price P0 = 100
P1 = 2.25 ( 100)
P1  = 225
Price of that place = 225

QUESTION: 20

If the index number of prices at a place in 1994 is 250 with 1984 as

base year, then the prices have increased on average

A. 250%

B. 150%

C. 350%
 D. None of these.

Solution:

QUESTION: 21

If the prices of all commodities in a place have decreased 35% over

the base period prices, then the index number of prices of that place
is now

A. 35

B. 135

C. 65

D. None of these.

Solution:

QUESTION: 22

Link relative index number is expressed for period n is

A.

B.

C.

D. None of these

Solution:
QUESTION: 23

Fisher’s Ideal Index number is expressed in terms of :

A.

B.

C.

D. None of these

Solution:

QUESTION: 24

Factor Reversal Test According to Fisher is

A.

B.

C.

D. None of these

Solution:
QUESTION: 25

Marshall Edge worth Index formula after interchange of p and q is

impressed in terms of :

A.

B.

C.

D. None of these

Solution:

QUESTION: 26

If ∑ Pnqn= 249, ∑ Poqo = 150, Paasche’s Index Number = 150 and

Drobiseh and Bowely’s Index number = 145. Then the Fisher’s Ideal
Index Number is

A. 75

B. 60

C. 145.97

D. None of these

Solution:
QUESTION: 27

Consumer Price index number for the year 1957 was 313 with 1940 as
the base year 96 the Average Monthly wages in 1957 of the workers
into factory be Rs. 160/- their real wages is

A. Rs. 48.40

B. Rs. 51.12

C. Rs. 40.30

D. None of these.

Solution:

QUESTION: 28

If ∑ Poqo = 3500, ∑ Pnqo = 3850. Then the Cost of living Index (C.L.T.)
for 1950 w.r. to base 1960 is

A. 110

B. 90

C. 100

D. None of these.

Solution:

QUESTION: 29

From the following table by the method of relatives using Arithmetic

mean the price Index number is
 A. 140.35

B. 148.95

C. 140.75

D. None of these.

Solution:

QUESTION: 30

Each of the following statements is either True or False with your

choice of the answer by writing F for False.

A. Base year quantities are taken as weights in Laspeyre’s price Index number.

B. Fisher’s ideal index is equal to the Arithmetic mean of Laspeyre’s and Paasche’s
index numbers.

C. Laspeyre’s index number formula does not satisfy time reversal test.

D. None of these.

Solution:

QUESTION: 31

Each of the following statements is either True or False with your

choice of the answer by writing F for False.

A. Current year quantities are taken as weight in Paasche’s price index number.

B. Edge worth Marshall’s index number formula satisfies Time, Reversal Test.

C. The Arithmetic mean of Laspeyre’s and Paasche’s index numbers is called

Bowely’s index numbers.

D. None of these.
Solution:

QUESTION: 32

Each of the following statements is either True or False with your

choice of the answer by writing F for False.

A. Current year price are taken as weights in Paasche’s quantity index number.

B. Fisher’s Ideal Index formula satisfies factor Reversal Test.

C. The sum of the quantities of the base period and current period is taken as
weights in Laspeyre’s index number. 

D. None of these.

Solution:

QUESTION: 33

Each of the following statements is either True or False with your

choice of the answer by writing F for False.

A. Simple Aggregative and simple Geometric mean of price relatives formula satisfy
circular Test.

B. Base year prices are taken as weights in Laspeyre’s quantity index numbers.

C. Fisher’s Ideal Index formula obeys time reversal and factor reversal tests.

D. None of these.

Solution:
QUESTION: 34

In 1980,the net monthly income of the employee was Rs. 800/- p. m.

The consumer price index number was 160 in 1980. It rises to 200 in
1984. If he has to be rightly compensated.The additional D. A. to be
paid to the employee is

A. Rs. 175/-

B. Rs. 185/-

C. Rs. 200/-

D. Rs. 125.

Solution:

QUESTION: 35

The simple Aggregative formula and weighted aggregative formula

satisfy is

A. Factor Reversal Test

B. Circular Test

C. Unit Test

D. None of these

Solution:

*Multiple options can be correct

QUESTION: 36

“Fisher’s Ideal Index is the only formula which satisfies”

A. Time Reversal Test

 B. Circular Test

C. Factor Reversal Test

D. None of these

Solution:

QUESTION: 37

“Neither Laspeyre’s formula nor Paasche’s formula obeys” :

A. Time Reversal and factor Reversal Tests of index numbers.

B. Unit Test and circular Tests of index number.

C. Time Reversal and Unit Test of index number.

D. None of these.

Solution:

QUESTION: 38

The aggregative expenditure method and family budget method

always give:

A. Different results

B. Approximate results

C. Same results

D. None of them

Solution:
QUESTION: 39

With the base year 1960 as the base the C. L. I. In 1972 stood at 250 x
was getting a monthly Salary of Rs. 500 in 1960 and Rs. 750 in 1972.
In 1972 to maintain his standard of living in 1960 x have received as
extra allowances is

A. Rs. 600/-

B. Rs. 500/-

C. Rs. 300/-

D. none of these.

Solution:

QUESTION: 40

From the following data base year :-

Fisher’s Ideal Index is

A. 117.3

B. 115.43

C. 118.35

D. 116.48

Solution:

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