Tag: business mathematics and statistics

Questions Related to business mathematics and statistics

Index numbers are expressed in:

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. Ratios

  2. Squares

  3. Percentages

  4. Combinations

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  Index numbers are expressed in : $Percentage$.

$\Rightarrow$  Index numbers are expressed in terms of percentages to show the extent of relative change.
$\Rightarrow$  Index numbers measure relative changes. They measure the relative change in the value of a variable or a group of related variables over a period of time or between places.
$\Rightarrow$  Index numbers measures changes which are not directly measurable.

Why do we need an index number?

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. helpful in measuring changes in value of money

  2. helful for business community

  3. in measuring labour quality

  4. All the above

Show answer
Correct Option: A,B
Explanation:

We need an index number because it is helpful in measuring changes in value of money and it is also helpful for business community.

Index numbers can be used for:

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. Forecasting

  2. Fixed prices

  3. Different prices

  4. Constant prices

Show answer
Correct Option: A
Explanation:

Index number can be used for Forecasting.
This index number is a useful number that helps us quantify changes in our field. It is easier to see one value than a thousand different values for each item in our field.

How many types are used for the calculation of index numbers:

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. $2$

  2. $3$

  3. $4$

  4. $5$

Show answer
Correct Option: A
Explanation:

$\Rightarrow$  There are $Two$ types used for the calculation of index numbers.

$\Rightarrow$  Types of calculating index numbers are :
$(1)$  Simple Aggregative Method.
$(2)$  Simple Average of price relative method.

An index number is called a simple index when it is computed from: 

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. Single variable

  2. Bi-variable

  3. Multiple variables

  4. None of them

Show answer
Correct Option: A
Explanation:

$\Rightarrow$  An index number is called a simple index when it is computed from : $Single\, variable$.

$\Rightarrow$  Simple index numbers grant equal importance to all items no matter what share it has. In other words, it considers each item to be equal with respect to the given variable. 
$\Rightarrow$  A simple index number is a number that measures a relative change in a single variable with respect to a base.

Consumer price index indicates:

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. Rise

  2. Fall

  3. Both (a) and (b)

  4. Neither (a) and (b)

Show answer
Correct Option: C
Explanation:

The Consumer Price Index (CPI) indicates the measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services.

It indicates both Rise and Fall in the price.

Purchasing power of money can be accessed through:

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. Simple index

  2. Fishers index

  3. Consumer price index

  4. Volume index

Show answer
Correct Option: C
Explanation:

Purchasing Power is just a short phrase for how much your money buys you.

Purchasing power of money can be accessed through Consumer Price Index

In constructing index number geometric mean relatives are: 

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. Non-reversible

  2. Reciprocal

  3. Reversible

  4. None of them

Show answer
Correct Option: C
Explanation:

In constructing index number geometric means relatives are Reversible.

Consumer price index numbers are obtained by:

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. Laspeyre's formula

  2. Fisher ideal formula

  3. Marshall Edgeworth formula

  4. Paasche's formula

Show answer
Correct Option: A
Explanation:

CPI figures for most countries are usually calculated by using a Laspeyre's Index or Lowe Index.


The CPI calculated via a Paasche index, helps give an idea of what today basket would have cost at yesterday prices.
Answer. (A)

Most commonly used index number is:

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. Volume index number

  2. Value index number

  3. Price index number

  4. Simple index number

Show answer
Correct Option: C
Explanation:

Price Index Number is a normalized average (typically a weighted average) of price relatives for a given class of goods or services in a given region, during a given interval of time. It is the most commonly used index number.