NCERT Solutions for Class 11 Economics Statistics for Economics Chapter 8

Index Numbers Class 11

Chapter 8 Index Numbers Exercise Solutions

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Exercise : Solutions of Questions on Page Number : 118

Q1 :  

An index number which accounts for the relative importance of the items is known as

(i) weighted index

(ii) simple aggregative index

(iii) simple average of relatives


Answer :

An index number which accounts for the relative importance of the items is known as weighted index

An index number in which different items of the series are accorded weight age according to their relative importance is known as Weighted Index Numbers. It is the weighted average of the prices of different goods.

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Q2 :  

In most of the weighted index numbers the weight pertains to

(i) base year

(ii) current year

(iii) both base and current year


Answer :

In most of the weighted index numbers, the weight pertains to current year.

In the Weighted Method of calculating index numbers, different goods are accorded weights according to the quantity brought. Laspeyre's method uses base year's quantities as weights, Paasche's method uses current year's quantities as weights and Fisher's method uses both base year as well as current year's quantities as base.

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Q3 :  

The impact of change in the price of a commodity with little weight in the index will be

(i) small

(ii) large

(iii) uncertain


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Q4 :  

A consumer price index measures changes in

(i) retail prices

(ii) wholesale prices

(iii) producers prices


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Q5 :  

The item having the highest weight in consumer price index for industrial workers is

(i) Food

(ii) Housing

(iii) Clothing


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Q6 :  

In general, inflation is calculated by using

(i) wholesale price index

(ii) consumer price index

(iii) producers' price index


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Q7 :  

Why do we need an index number?


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Q8 :  

What are the desirable properties of the base period?


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Q9 :  

Why is it essential to have different CPI for different categories of consumers?


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Q10 :  

What does a consumer price index for industrial workers measure?


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Q11 :  

What is the difference between a price index and a quantity index?


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Q12 :  

Is the change in any price reflected in a price index number?


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Q13 :  

Can the CPI number for urban non-manual employees represent the changes in the cost of living of the President of India?


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Q14 :  

The monthly per capita expenditure incurred by workers for an industrial centre during 1980 and 2005 on the following items are given below. The weights of these items are 75, 10, 5, 6 and 4 respectively. Prepare a weighted index number for cost of living for 2005 with 1980 as the base.

 

Items

Price in 1980

Price in 2005

Food


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Q15 :  

Read the following table carefully and give your comments.

INDEX OF INDUSTRIAL PRODUCTION BASE 1993 - 94

 

Industry

Weight (in %)

1996 - 97


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Q16 :  

Try to list the important items of consumption in your family.


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Q17 :  

If the salary of a person in the base year is Rs 4,000 per annum and the current year salary is Rs 6,000, by how much should his salary rise to maintain the same standard of living if the CPI is 400?


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Q18 :  

The consumer price index for June, 2005 was 125. The food index was 120 and that of other items 135. What is the percentage of the total weight given to food?


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Q19 :  

An enquiry into the budgets of the middle class families in a certain city gave the following information;

 

Expenses on items

Food

Fuel

Clothing


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Q20 :  

Record the daily expenditure, quantities bought and prices paid per unit of the daily purchases of your family for two weeks. How has the price change affected your family?


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Q21 :  

Given the following data:

Year

CPI of Industrial

Workers

(1982 = 100)

CPI of Urban

Non-manual


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<< Previous Chapter 7 : Correlation

Statistics for Economics - Economics : CBSE NCERT Exercise Solutions for Class 11th for Index Numbers will be available online in PDF book form soon. The solutions are absolutely Free. Soon you will be able to download the solutions.

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