Index numbers are used to measure seasonal and cyclical variations in?
Correct answer C. Time Series
Topic / 40 questions
Index Number MCQs
Index Number MCQs cover the statistical tools used to measure relative change in prices, quantities or values over time, such as the Laspeyres and Paasche indices. They help statistics and economics students, lecturer test candidates and banking exam takers. Every question shows its correct answer instantly, so you can check formulas and concepts as you practise.
What is an index number calculated for more than one item called?
Correct answer D. Simple aggregative index number
The ratio of a given year’s price to the base year’s price, expressed as a percentage, is called the?
Correct answer B. Price relative
Advertisement
Into how many categories can weighted index numbers be classified?
Correct answer D. Two
In which method is the previous year’s price used as the base?
Correct answer A. Chain Method
What is an index number that measures changes in the quantity of goods called?
Correct answer C. Quantity Index Number
An index number is a ____ for measuring changes in a variable or group of related variables. Which word fills the blank?
Correct answer C. Device
Index numbers play an important role in the fields of economics and?
Correct answer C. Business
What does the symbol Q0n stand for in index numbers for a given year?
Correct answer C. Quantity Index
Advertisement
In the chain base method, the base period?
Correct answer A. Changes
Which formula gives the link relative?
Correct answer C. pn/pn−1 × 100
Which formula gives Paasche’s price index number?
Correct answer B. ∑pnqn/∑p0qn × 100
Which formula is used in constructing chain indices?
Correct answer C. pn/pn−1 × 100
What is the index number of the base period always equal to?
Correct answer C. 100
What is the ratio of a new price to the base-year price called?
Correct answer B. Price relative
Advertisement
Which statement describes a simple aggregate price index?
Correct answer A. Ignores relative quantities
The Laspeyres and Paasche indices are examples of?
Correct answer A. Weighted index numbers
What does the formula (∑p0qn/∑p0q0) × 100 calculate?
Correct answer A. The Laspeyres quantity index
What is a scaling factor used for in index numbers?
Correct answer A. Change the base year
No single index number is suitable for every?
Correct answer A. Purpose
About Index Number MCQs
Index numbers compare a current period with a base period, usually expressed as a percentage of 100. Questions on this page cover notation such as q0n, the purpose of an index and how it shapes the choice of base and weights, and the difference between the Laspeyres index, which uses base-year quantities as weights, and the Paasche index, which uses current-year quantities. You will also find items on why no single index suits every purpose, how weighting systems change, and how index numbers help study seasonal and cyclical variation in economic data. The topic is common in statistics and economics papers.
Exams that include Index Number MCQs
Pakistan
- PPSC Lecturer tests
- FPSC
- CSS
- Banking job tests
India
- UGC NET
- SSC CGL
- State PSC exams
Bangladesh
- BCS
- Bangladesh Bank recruitment
- Bank job exams
Frequently asked questions
What is the difference between the Laspeyres and Paasche index?
The Laspeyres price index weights prices by base-year quantities, while the Paasche price index weights them by current-year quantities. Laspeyres is easier to compute over time because the weights stay fixed, but it can overstate price rises. Paasche reflects current buying patterns but needs new quantity data each period.
Why are index numbers called economic barometers?
Index numbers are called economic barometers because they show changes in prices, production, trade and living costs over time in a single comparable figure. Governments, banks and businesses use them to track inflation, adjust wages and plan policy, much as a barometer tracks changes in air pressure.
How many Index Number MCQs are on MCQs360?
MCQs360 has 41 Index Number MCQs, free to practise with no sign-up. Each question displays its answer instantly, which makes it simple to revise the Laspeyres and Paasche formulas, base periods and weights before a statistics or economics test.
Last reviewed October 2026