## Quantitative Methods for the Economic Analysis practice question paper:

**Question: **A good index number is one which satisfies

(1) Unit test (2) Time reversal test (3) Factor reversal test

Which of the following is correct?

(a) 1 only

(c) 2 & 3

(b) 2 only

(d) 7,2 & 3

**Question: **__ probability is the probability that an event will occur given that another Event has already occurred

(a) Conditional event

(b) Compound event

(c) Marginal event

(d) both b and c

**Question: **Which of the following is not a correct statement about a probability?

(a) The value of probability lies between 0 and 1

(b) lt can be reported as a decimal or a fraction

(c) A value near L means that the event will occur

(d) lt is only applicable in the case of certain case

**Question: **Fishers ideal index is obtained as :

(a) the sum of Laspeyre’s & paasche’s indices

(b) the geometric mean of Laspeyer’s & paasche’s indices

(c) the arithemetic mean of Laspeyer’s & paasche’s indices

(d) the harmonic mean of Laspeyre’s & paasche’s indices

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**Question: **lf the occurrence of one event means that another cannot happen, then the events are

(a) independent

(b) any event

(c) Mutually Exclusive

(d) none of the above

**Question: **The major purpose of price index is to measure change in the

(a) standard of living

(b) cold content of money

(c) Buying power of money

(d) Capacity to produce

**Question: **The joint probability is

(a) The likelihood of two events happening together

(b) The likelihood of an event happening given that another event has already happened

(c) Based on two mutually exclusive events

(d) None of the above

**Question: **For an impossible event the value of probability will be

(a) less than 1

(b) greater than one

(c) 0

(d) 1

**Question: **Making allowances for the effect of changing price levels is called

(a) Splicing

(b) Base shifting

(c) Deflating

(d) None of these

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**Question: **If you roll a pair of dice, what is the probability that one of the dice is a 4 or the sum of the dice is 7?

(a) 4/36

(b) 21/36

(c) 13/36

(d) 15/36

**Question: **Which one of the following statements is correct?

(1) Laspeyres’ index shows an upward bias

(2) Paastes’ index shows an upward bias

(3) Paasche index shows an upward bias

(4) Paasche index shows an downward bias

(a) 1& 4

(c) 2 & 3

(b) 1 only

(d) 3 & 4

**Question: **The set of all possible outcomes in an experiment is known as

(a) Sample space

(b) Universal set

(c) Sample point

(d) Random experiment

**Question: **The name associated with Subjective probability is

(a) Ramsey

(b) Kolmogorov

(c) Franklin

(d) None of the above

**Question: **The consumer price index numbers are also known as ” ”

(a) cost of living index number

(b) Price of living index

(c) Retail index

(d) All the above

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**Question: **The outcomes of an experiment are called

(a) trial

(b) event

(c) experiment

(d) random experiment

**Question: **In the consumer price index, the number of weights are determined on the basis of __

(a) Actual price of the index

(b) the consumption pattern of the class of population

(c) Actual consumption expenditure

(d) Both price & consumption expenditure

**Question: **The name associated with Subjective probability is

(a) Ramsey

(b) Kolmogorov

(c) Richard Good

(d) Savage

**Question: **Simple event is also known as

(a) Elementary event

(b) composite event

(c) joint event

(d) None of the above

**Question: **Recurrent variations in time series that usually last longer than a year is known as

(a) Seasonal variation

(b) Secular trend

(c) irregular variation

(d) Cyclical variation

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**Question: **Composite event is also known as

(a) Elementary event

(b) compound event

(c) joint event

(d) None of the above

**Question: **__ probability is the probability of a single event without consideration of any other event

(a) Conditional event

(b) Compound event

(c) Marginal event

(d) none of the above

**Question: **The weighted average of price relations using basic values as weights is same as the __

(a) Laspeyre’s quantity index

(b) Paasche’s price index

(c) Laspeyre’s price index

(d) Kelly’s price index

**Question: **Paasche’s index measures change in

(a) fixed market basket

(b) current consumption

(c) both fixed and current market

(d) None

**Question: **The procedure of combining two or more overlapping series of index numbers into one continuous series is called

(a) Splicing

(b) Base shifting

(c) Deflating

(d) None of these

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**Question: **Weather or climate changes are examples of

(a) Secular trend

(b) Seasonal variation

(c) Cyclical variation

(d) Irregular variation

**Question: **Which one of the following indices satisfies both time reversal and factor reversal list?

(a) Lasperyres index number

(b) Fischer’s index number

(c) Paasche’s index number

(d) Bowley’s index number

**Question: **Method of moving average is used to measure

(a) Secular trend

(b) Seasonal Variations

(c) Cyclical variation

(d) Irregular Variation

**Question: **Number of components of a time series are __

(a) Two

(b) Four

(c) Many

(d) Cannot be stated

**Question: **The method which is not used for estimating seasonal components of a time series

(a) Ratio to trend method

(b) Link relative method

(c) Method of simple average

(d) Method of least squares

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**Question: **Which one of the following index numbers is based on Geometric Mean ?

(a) Lasperyres index number

(b) Fischer’s index number

(c) Paasches index number

(d) Bowley’s index number

**Question: **Cost of living index is known as

(a) Consumer Price index

(b) wholesale Price index

(c) Quantity index

(d) None

**Question: **Index Numbers measure

(a) the change in base year prices

(b) the change in current year prices

(c) real changes

(d) None of the above

**Question: **Which of the following is described as’ barometers of economic activity’?

(a) Index number

(b) Correlation

(c) Regression

(d) Time series

**Question: **If the Paasche’s index is 196 and Fishers index is 210, What is the value of the Laspeyre’s index?

(a) 220

(b) 215

(c) 225

(d) 230

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**Question: **Test to determine whether a given method will work both forward & backward

(a) Unit test

(b) Factor reversal test

(c) time reversal test

(d) None

**Question: **The day to day irregularities in business activity are the example of

(a) Secular trend

(b) Seasonal fluctuations

(c) Cyclical fluctuations

(d) random or erratic fluctuations

**Question: **A function is said to be maximum at x – a if

(a) *f*‘(a) is negative and *f*” (n) zero

(b) *f*‘(a) is zero and *f*” (a) is negative

(c) *f*‘(a) is zero and *f*” (a) is zero

(d) *f*‘(a) is negative and *f*” (a) is negative

**Question: **The price index that uses base year quantities as weights is called __

(a) Paasches index

(b) Lasperyres index

(c) Fischer’s index

(d) whole sale price index

**Question: **A function is said to be minimum

(a) f’ = 0 and f” > 0

(b) f’ = 0 and f ” < 0

(c) f ‘ > 0 and f” = 0

(d) f’ < 0 and f” = 0

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**Question: **Fisher’s ideal index Number satisfies

(a) Time reversal & factor reversal list

(b) only time reversal list

(c) only factor reversal list

(d) circular list

**Question: **Increasing function if and only if its derivatives on (a’ b) is

(a) Negative

(b) Non–negative

(c) Non–positive

(d) None of the above