UNIT-I
Question 1 (Any 4) [1x4=4]
(a) Define index number.
An index number is a specialized average designed to measure the changes in a group of related variables over a period of time.
(b) State some limitations of index number.
(c) State some applications of index number.
[span_8](start_span)(d) Write Paasche's index number formula.
P01 = [Sum(p1 * q1) / Sum(p0 * q1)] * 100
(e) What is base year in an index number?
[span_14](start_span)The base year is a reference year or standard period against which changes in the current period are compared.
[span_14](end_span)Question 2(a) [2]
"Index numbers are economic barometers." Explain.
Index numbers are called economic barometers because they measure the state of the economy just as a barometer measures atmospheric pressure. They reflect shifts in business activity, inflation, and production, allowing policymakers to understand economic trends and health.
Question 3(b) [8]
Construct price index numbers for 1995 with 1990 as base:
| Comm. | p0 | q0 | p1 | q1 | p1q0 | p0q0 | p1q1 | p0q1 |
|---|---|---|---|---|---|---|---|---|
| A | 4 | 20 | 6 | 10 | 120 | 80 | 60 | 40 |
| B | 3 | 15 | 5 | 23 | 75 | 45 | 115 | 69 |
| C | 2 | 25 | 3 | 15 | 75 | 50 | 45 | 30 |
| D | 5 | 10 | 4 | 40 | 40 | 50 | 160 | 200 |
| Total | - | - | - | - | 310 | 225 | 380 | 339 |
UNIT-II
Question 4 (Any 4) [1x4=4]
(a) Define time reversal test.
[span_24](start_span)A test requiring that if the time subscripts (0 and 1) are interchanged, the resulting index should be the reciprocal of the original: P01 * P10 = 1.
[span_24](end_span)(c) Fill in the blank: Fisher's index number is known as ideal index number.
(d) Fill in the blank: Fisher's index number is Geometric Mean of Laspeyres' and Paasche's index number.
Question 6(a) [2+4+2=8]
Define CPI, Steps, and Uses.
Definition: Consumer Price Index (CPI) measures the average change over time in the prices paid by consumers for a representative basket of goods and services.
Steps: 1. Selection of the consumer group. 2. Conduct family budget inquiry. 3. Selection of base year. 4. Selection of items/commodities. 5. Collection of price quotations.
Uses: Used to calculate Real Wages, deflation of income, and adjustment of dearness allowance (DA).
UNIT-III
Question 7 (Any 4) [1x4=4]
(a) Define time series.
A set of observations recorded at successive intervals of time.
(d) Define trend in time series.
[span_35](start_span)Trend is the long-term smooth general tendency of the data to increase or decrease over a long period.
[span_35](end_span)Question 8(b) [8]
(i) Fire in a factory: Irregular/Random variation.
(ii) Sale of umbrella during summer: Seasonal variation.
(iii) Fall in death rate due to science: Secular Trend.
(iv) Flood due to heavy rain: Irregular/Random variation.
UNIT-IV
Question 12(a) [8]
Fit a straight-line equation (Y = a + bX):
| Year | Prod (Y) | x (t-1963) | x² | xy |
|---|---|---|---|---|
| 1960 | 40 | -3 | 9 | -120 |
| 1961 | 60 | -2 | 4 | -120 |
| 1962 | 50 | -1 | 1 | -50 |
| 1963 | 70 | 0 | 0 | 0 |
| 1964 | 55 | 1 | 1 | 55 |
| 1965 | 75 | 2 | 4 | 150 |
| 1966 | 50 | 3 | 9 | 150 |
| Total | 400 | 0 | 28 | 65 |
a = Sum(Y)/n = 400/7 = 57.14
b = Sum(xy)/Sum(x²) = 65/28 = 2.32
Equation: Y = 57.14 + 2.32X
UNIT-V
Question 13 (Any 4) [1x4=4]
(a) Define seasonality.
Regular periodic fluctuations that repeat within a period of 12 months (e.g., weather, festivals).
(d) Blank: Moving average method eliminates short-term/seasonal variations.
Important Formulas List
Answer Presentation Strategy
© 2026 Knowlet. All Rights Reserved.