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Explain the meaning of index number. - Economics

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प्रश्न

Explain the meaning of index number.

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उत्तर

"An index number is a statistical measure designed to show changes in a variable or a group of related variables with reference to time, geographical location, and other characteristics such as income, profession, etc."

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2021-2022 (March) Set 1

संबंधित प्रश्न

______ : Base year prices :: P1 : Current year prices.


Complete the Correlation:

__________ : Single variable :: Composite index : Group of variables


State with reasons whether you agree or disagree with the following statement:

Index numbers can be constructed without the base year.


Explain the features of index numbers.


Features of index numbers:

  1. It is useful in framing suitable economic policies.
  2. It is useful to present financial data in real terms
  3. Index numbers are statistical devices.
  4. Index numbers are specialized averages.

Index numbers that measure changes in the level of output or physical volume of production in the economy −


Device that measures changes in an economic variable or a group of variables over a period of time –


Find the odd word

Types of index numbers -


Index number was originally developed to measure ______.


Index number which is computed from a single variable called is a ______.


Identify & explain the concept from the given illustration.

Bombay Stock Exchange has developed “Sensex” as a stock market index for reflecting the share prices of listed companies.


Identify & explain the concept from the given illustration.

Agricultural Research Institute constructed an index number to measure changes in the production of raw cotton in Maharashtra during the period 2015-2020.


State the uses of Index Number


Define Laspeyre’s price index number


Explain Paasche’s price index number


State the test of adequacy of index number


Define Time Reversal Test


Define true value ratio


Define family budget method


State the uses of cost of Living Index Number


Calculate by a suitable method, the index number of price from the following data:

Commodity 2002 2012
Price Quantity Price Quantity
A 10 20 16 10
B 12 34 18 42
C 15 30 20 26

Using the following data, construct Fisher’s Ideal index and show how it satisfies Factor Reversal Test and Time Reversal Test?

Commodity Price in Rupees per unit Number of units
Basic year Current year Base year Current year
A 6 10 50 56
B 2 2 100 120
C 4 6 60 60
D 10 12 50 24
E 8 12 40 36

The following are the group index numbers and the group weights of an average working class family’s budget. Construct the cost of living index number:

Groups Food Fuel and
Lighting
Clothing Rent Miscellaneous
Index Number  2450 1240 3250 3750 4190
Weight 48 20 12 15 10

Calculate the cost of living index by aggregate expenditure method:

Commodity Weight
2010
Price (Rs.)
2010 2015
P 80 22 25
Q 30 30 45
R 25 42 50
S 40 25 35
T 50 36 52

Choose the correct alternative:

Laspeyre’s index = 110, Paasche’s index = 108, then Fisher’s Ideal index is equal to:


Choose the correct alternative:

Cost of living at two different cities can be compared with the help of


Choose the correct alternative:

Most commonly used index number is:


Choose the correct alternative:

While computing a weighted index, the current period quantities are used in the:


Calculate the Laspeyre’s, Paasche’s and Fisher’s price index number for the following data. Interpret on the data.

Commodities Base Year Current Year
Price Quantity Price  Quantity
A 170 562 72 632
B 192 535 70 756
C 195 639 95 926
D 1987 128 92 255
E 1985 542 92 632
F 150 217 180 314
7 12.6 12.7 12.5 12.8
8 12.4 12.3 12.6 12.5
9 12.6 12.5 12.3 12.6
10 12.1 12.7 12.5 12.8

Compute the consumer price index for 2015 on the basis of 2014 from the following data.

Commodities Quantities Prices in 2015 Prices in 2016
A 6 5.75 6.00
B 6 5.00 8.00
C 1 6.00 9.00
D 6 8.00 10.00
E 4 2.00 1.50
F 1 20.00 15.00

An Enquiry was made into the budgets of the middle class families in a city gave the following information.

Expenditure Food Rent Clothing Fuel Rice
Price(2010) 150 50 100 20 60
Price(2011) 174 60 125 25 90
Weights 35 15 20 10 20

What changes in the cost of living have taken place in the middle class families of a city?


Assertion and reasoning question:

  • Assertion (A): The index number considers all factors.
  • Reasoning (R): The index number is based on samples.

State with reasons whether you agree or disagree with the following statement:

Index number measures changes in the price level only.


Choose the correct pair :

Group A Group B
1) Price Index a) `(sump_1q_1)/(sump_0q_0) xx100`
2) Value Index

b)

`(sumq_1)/(sumq_0) xx 100`
3) Quantity Index c) `(sump_1q_1)/(sump_0q_1) xx100`
4) Paasche's Index d) `(sump_1)/(sump_0) xx 100`

The base year's index of a selected variable is assumed as ______.


Find the odd word out:

Features of Index Number:


Complete the correlation:

P0 : ______ : : P1 : Current year price.


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