Any2Quiz
ICSE / 11 / Economics

Statistics – Index Numbers (Simple, Weighted, Price & Quantity Indexes) Quiz - ICSE Class 11 Economics

Free practice quiz: Statistics – Index Numbers (Simple, Weighted, Price & Quantity Indexes) (ICSE Class 11 Economics). 69 multiple-choice questions with answers and explanations. Play online, no sign-up needed.

Play all 69 questions free

Sample questions

  1. When constructing a weighted index number, if the weights assigned to different commodities are the quantity of goods produced in the base year, which type of index is being calculated?

    1. Simple Aggregate Index
    2. Weighted Aggregate Index
    3. Laspeyres Price Index
    4. Paasche Price Index
    Show answer

    Answer: B. Weighted Aggregate Index

    When quantities from the base year are used as weights, it signifies a weighted approach. While Laspeyres and Paasche use quantities as weights, the question specifies 'quantity of goods produced in the base year' as the weight itself, directly pointing to a Weighted Aggregate Index. Laspeyres uses base year quantities and current year prices, and Paasche uses current year quantities and current year prices. A simple aggregate index does not use weights.

  2. If the index of production for a sector moves from 100 in Year 1 to 115 in Year 2, and the base year quantities are used as weights, what is the most accurate interpretation?

    1. The average price of production inputs has increased by 15%.
    2. The output quantity of the sector has increased by 15%.
    3. The value of production at base year prices has increased by 15%.
    4. The total cost of production has increased by 15%.
    Show answer

    Answer: B. The output quantity of the sector has increased by 15%.

    An index of production, especially when referring to quantities and using base year quantities as weights (which is typical for quantity indices, analogous to Laspeyres for prices), measures the change in the volume of output. An increase from 100 to 115 signifies a 15% rise in the quantity produced.

  3. The term 'chain index' in the context of index numbers refers to:

    1. An index where the base period is changed every year.
    2. An index that links together price relatives from different periods.
    3. An index that exclusively uses chain-linking for quantity weights.
    4. An index that measures the change in the cost of a fixed chain of items.
    Show answer

    Answer: B. An index that links together price relatives from different periods.

    Chain indexing involves linking index numbers from one period to the next. The index for a later period is calculated based on the index of the immediately preceding period, allowing for a continuous measure of change over time, and often incorporating updated weights or baskets.

  4. Which type of index is more likely to be influenced by changes in consumer purchasing patterns over time?

    1. Laspeyres Index
    2. Paasche Index
    3. Fisher's Ideal Index
    4. Fixed-base Simple Aggregate Index
    Show answer

    Answer: B. Paasche Index

    The Paasche Index uses current period quantities as weights. As consumer purchasing patterns change, the quantities consumed in the current period will reflect these changes. Therefore, the Paasche Index is more sensitive to shifts in consumption patterns than the Laspeyres Index, which uses fixed base-period quantities.

  5. When calculating a Paasche price index, the weights used are:

    1. Quantities of the base period.
    2. Quantities of the current period.
    3. Values of the base period.
    4. Values of the current period.
    Show answer

    Answer: B. Quantities of the current period.

    The Paasche Price Index uses the quantities of the current period as weights. This reflects current consumption or production patterns, making it sensitive to shifts in these patterns.

Take the full quiz

More quizzes

Browse all Economics quizzes