The Laspeyres index is criticized because it: MCQ with Answer and Explanation

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The Laspeyres index is criticized because it:

A. Satisfies time reversal test

B. Does not account for substitution effect

C. Is difficult to compute

D. Uses current period quantities

Answer: Option B

Solution (By JKExamLibrary)

Laspeyres uses fixed base period weights, ignoring consumer substitution to cheaper goods.

This question belongs to: Accountancy and Statistics Statistics

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Practice More Statistics Questions

Question #1 Report Error

The starting population of a life table is known as the:

A. Radix

B. Base population

C. Cohort

D. Sample

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Correct Answer: Option A

Explanation:
The radix is the assumed initial birth cohort (usually 100,000) for which the life table functions are computed.

This question belongs to: Accountancy and Statistics Statistics

Question #2 Report Error

Life tables are primarily used to compute:

A. Life expectancy

B. Migration rates

C. Population density

D. Fertility rates

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Correct Answer: Option A

Explanation:
Life tables synthesize mortality rates to derive life expectancy and survival probabilities.

This question belongs to: Accountancy and Statistics Statistics

Question #3 Report Error

Primary data is collected:

A. From government reports

B. By the investigator for the first time for a specific purpose

C. From old records

D. From published sources

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Correct Answer: Option B

Explanation:
Primary data is original data gathered directly by the researcher for the current study.

This question belongs to: Accountancy and Statistics Statistics

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