Paasche price index is calculated as: MCQ with Answer and Explanation

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Paasche price index is calculated as:

A. √[Σ(p₁q₀)/Σ(p₀q₀) × Σ(p₁q₁)/Σ(p₀q₁)] × 100

B. Σ(p₁q₀)/Σ(p₀q₀) × 100

C. Σ(p₁q₁)/Σ(p₀q₁) × 100

D. Σ(p₁q₁)/Σ(p₀q₀) × 100

Answer: Option C

Solution (By JKExamLibrary)

Paasche index = Σ(p₁q₁)/Σ(p₀q₁) × 100, using current period quantities (q₁) as weights, which may understate inflation due to substitution effects but reflects current consumption patterns.

This question belongs to: Accountancy and Statistics Statistics

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Practice More Statistics Questions

Question #1 Report Error

In a pie chart, the angle of a sector for a category with frequency 30 out of total 120 is:

A. 60°

B. 90°

C. 120°

D. 30°

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Correct Answer: Option B

Explanation:
Angle = (30/120) × 360 = 90°.

This question belongs to: Accountancy and Statistics Statistics

Question #2 Report Error

Chain base index numbers are constructed using:

A. Geometric mean of price relatives only

B. Fixed base year weights

C. Link relatives with shifting base

D. Average of Laspeyres and Paasche

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Correct Answer: Option C

Explanation:
Chain indices are compiled by linking relative changes (link relatives) where each period is compared with the immediately preceding period.

This question belongs to: Accountancy and Statistics Statistics

Question #3 Report Error

The median of the dataset: 10, 15, 20, 25, 30, 35 is:

A. 30

B. 20

C. 22.5

D. 25

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Correct Answer: Option C

Explanation:
With 6 observations (even), median = average of 3rd and 4th values in ordered list: (20 + 25)/2 = 22.5. This splits the data into two equal halves.

This question belongs to: Accountancy and Statistics Statistics

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