**Quantitative Methods for Economic Analysis 1 Multiple Choice Questions**

**1. The following integers were obtained as the number of visits to a gift shop, per hour, overseveral days. the mean of the above data, to 2 decimal places.**

A. 2.80

B. 3.00

C. 2.81

D. 2.8

**Answer: **C.2.81

**2. You are conducting a survey of the people of India to find out how popular football isamong the Indians. You randomly choose people to call, and make 1,000 phone calls to people scattered across the country. In this study, what of the following statement is true**

A. both the people of india and the people you called is the population

B. the people of india is called the population, and the people you called are the sample.

C. the people of india is the sample, and the people you called is the population.

D. both the people of india and the people you called are samples.

**Answer: **B.the people of india is called the population, and the people you called are the sample.

**3. A _____ refers to the group in your study whereas a ______ refers to a distinct group of people**

A. population; sample

B. sample; population

C. sample; cohort

D. participant; population

**Answer: **B.sample; population

**4. Under what circumstances should we be cautious about using the mean as a measure of central tendency?**

A. when the data is skewed.

B. when data is positively skewed

C. when data is negatively skewed

D. all of the above

**Answer: **D.all of the above

**5. If b = 0 the line of best fit will conventionally be drawn ______**

A. as horizontal

B. as vertical

C. as provides the best fit to the scores

D. through the middle of the data points

**Answer: **A.as horizontal

**6. Linear regression can achieve which of the following**

A. allow us to predict someone’s statistical grade from their mathematical ability

B. allow us to identify how much variable y will change if variable x changes

C. allow us to predict that as the weather gets 30% colder, then the sales of sweaters will increase by 50%.

D. all of the above

**Answer: **A.allow us to predict someone’s statistical grade from their mathematical ability

**7. Linear regression means that every time the value of x increases, y changes by a______amount.**

A. increasing

B. decreasing

C. constant

D. all of the above

**Answer: **C.constant

**8. In regression, the variable being predicted is called the**

A. criterion or y variable

B. predictor variable or x

C. x

D. explanatory variable

**Answer: **A.criterion or y variable

**9. Which of the following is incorrect**

A. in linear regression a real line is drawn through the data points where total error is minimized.

B. in linear regression the line tells us by how much y is predicted to change as a result of a change in x.

C. in linear regression the line fits the data in the best place possible.

D. in linear regression the line of best fit maximises the distance between the scores and the regression line.

**Answer: **D.in linear regression the line of best fit maximises the distance between the scores and the regression line.

**10. A correlation coefficient of +0.40 could be considered**

A. weak

B. moderate

C. strong

D. zero

**Answer: **B.moderate

**11. The _________coefficient (r) is a ratio between the covariance (variance shared by two variables) and a measure of the separate variances.**

A. regression

B. elasticity

C. correlation

D. mean

**Answer: **C.correlation

**12. In correlation, for a positive relationship ____ scores on one variable tend to be associated with ____ scores on the other variable**

A. high; low

B. low; high

C. high; high

D. none of the above

**Answer: **C.high; high

**13. To construct a ________we take each person’s score on x and y and plot where they meet. Each data point represents two scores.**

A. scatter diagram

B. histogram

C. pie diagram

D. ogive

**Answer: **A.scatter diagram

**14. When two variables are correlated we can say**

A. that they have a perfect positive relationship

B. that they share variance

C. high scores are frequent on x and y

D. that they are independent

**Answer: **B.that they share variance

**15. Which of the following could be value of correlation coefficient**

A. 0.30

B. +1.00

C. −0.27

D. all of the above

**Answer: **D.all of the above

**16. In correlation, which of the following tells us that we have a perfect positive relationship**

A. r = +1

B. all the points on the scatter diagram would fall on a straight line and the slope would be from bottom left to top right of the plot

C. the dots on the scatter diagram would fall in a straight line from top left-hand corner down to bottom right hand corner

D. both a and b

**Answer: **D.both a and b

**17. You have a correlation coefficient of 0.45 between two variables. How much variance would these two variables (to the nearest whole number) share, in percentage terms**

A. 16%

B. 67%

C. 25%

D. 20%

**Answer: **D.20%

**18. A teacher surveys the students attending a seminar and finds that 20% are I BA studentsand 45% are II BA students. This is an example of**

A. descriptive statistics

B. inferential statistics

C. secondary data

D. nominal data

**Answer: **A.descriptive statistics

**19. Which of the following does not represent one method to obtain primary source data**

A. making observations

B. sending a survey to customers

C. looking in journals

D. conducting an experiment

**Answer: **C.looking in journals

**20. The grades that a random sample of BA students received over the last five years in Quantitative Techniques examinations represent what statistical concept**

A. the grades are a parameter

B. the grades are a statistic

C. the grades are a sample

D. the grades are a population

**Answer: **C.the grades are a sample

**21. What method is used to sample a population so that it is representative of the population**

A. samples are chosen at random from the population

B. every other element in a population is chosen

C. all but the observations that have the lowest and highest values are selected

D. only the first half of a population is selected

**Answer: **A.samples are chosen at random from the population

**22. An insurance agent earns a commission on each policy sold. This person made Rs.3,000in commissions during one month and concludes that annual compensation will be Rs. 36,000. This is an example of:**

A. descriptive statistics

B. inferential statistics

C. secondary data

D. nominal data

**Answer: **B.inferential statistics

**23. A student evaluation of teaching effectiveness for a particular course asks students to respond to their level of agreement with several statements according to the scale 1 = Strongly Agree, 2 = Agree, 3 = Neutral, 4 = Disagree, and 5 = Strongly Disagree. The responses indicate what level of measurement?**

A. ordinal

B. ratio

C. nominal

D. interval

**Answer: **A.ordinal

**24. A company publishes data on its quarterly earnings for its stockholders to evaluate.Which of the following is true**

A. the source is primary for both the company and the stockholders

B. the source is secondary for both the company and the stockholders

C. the source is primary for the company and secondary for the stockholders

D. the source is secondary for the company and primary for the stockholders

**Answer: **C.the source is primary for the company and secondary for the stockholders

**25. If you have a digital weighing machine in your college that only reads in integers, is your weight a discrete variable**

A. yes, because the scale reports integers

B. no, because weight is still a continuous variable regardless of the ability to measure it

C. it depends on the accuracy of the scale

D. it depends on your weight

**Answer: **B.no, because weight is still a continuous variable regardless of the ability to measure it

**26. Statistics is the study of _______ measures of the values associated with variables**

A. verbal

B. pictorial

C. descriptive

D. numerical

**Answer: **D.numerical

**27. ‘Primary source data is better than secondary source data’. This statement is**

A. true

B. false

C. neither true nor false

D. any of the above

**Answer: **B.false

**28. Celsius and Fahrenheit temperature scales are examples of interval levels of measurement**

A. true

B. false

C. neither true nor false

D. any of the above

**Answer: **A.true

**29. The number of students on a college campus is a continuous variable**

A. true

B. false

C. neither true nor false

D. any of the above

**Answer: **B.false

**30. ______refer to population characteristics while _____describe sample characteristics**

A. statistic, parameter

B. parameter, statistic

C. regression, correlation

D. correlation, regression

**Answer: **B.parameter, statistic

31. Gender is categorized as____data

A. nominal

B. ordinal

C. interval

D. ratio

**Answer: **A.nominal

32. You are conducting a study to see whether a new experimental medication will cause baldmen to grow hair. You divide your patients into 2 groups. To one group you give the medication. To the other group, you give a placebo. In this study, the correct terms for the taking of the medication and the growth of hair are the following.

A. both the medication and the hair growth are dependent variables

B. both the medication and the hair growth are independent variables

C. the medication is the dependent variable, and the hair growth is the independent variable

D. the medication is the independent variable, and the hair growth is the dependent variable

**Answer: **D.the medication is the independent variable, and the hair growth is the dependent variable

33. The concept of a variable implies that the values of every characteristic of an item are different

A. true

B. false

C. neither true nor false

D. any of the above

**Answer: **B.false

34. Which of the following definitions is the definition of the MEAN

A. the mean is the largest value

B. the mean is the value that half of the entries are below and half of the entries are above

C. the mean is the value that has the highest frequency

D. the mean is the average calculated by adding up all the values and dividing by the number

**Answer: **D.the mean is the average calculated by adding up all the values and dividing by the number

35. Which of the following definitions is the definition of the MEDIAN?

A. the median is the value that half of the entries are below and half of the entries are above

B. the median is the value that has the highest frequency

C. the median is the largest value

D. the median is the average calculated by adding up all the values and dividing by the

**Answer: **A.the median is the value that half of the entries are below and half of the entries are above

36. What is the median of the following set of numbers? {12,8,13,4,7,6,3,3,15}

A. 12

B. 8

C. 7

D. 7.5

**Answer: **D.7.5

37. A teacher had 5 students who took a test. Their test scores are as follows: 62, 86, 72, 66,72. What is the mode of the test

A. 72

B. 86

C. 62

D. 86

**Answer: **A.72

38. Students A,B and C took part in a recent quiz. Student A scored 50 points, Student Bscored 60 points and Student C scored 70 points. What is the mean of this quiz

A. 60

B. 50

C. 70

D. 45

**Answer: **A.60

39. Contestants of a competition have reached the semi-finals. After the semi-finals, theirscore are of below. Those whose score is lower than the median will not be able to enter the finals, so who managed to enter the finals. Here is the list of contestants: Anoop – 70 Points, Babu – 50 Points, Cindu – 65 Points, Das – 90 Points, Emy – 55 Points, Fasna – 85 Points, Gopi – 100 Points

A. babu, cindu and emy

B. anoop, das, fasnn and gopi

C. anoop, babu, cindu and emy

D. babu, cindu, das, gopi

**Answer: **B.anoop, das, fasnn and gopi

40. What is the median in the following numbers: 19, 21, 18, 17, 18, 22, 46

A. 19

B. 18

C. 17

D. 21

**Answer: **A.19

41. A teacher had 5 students who took a test. Their test scores are as follows: 62, 86, 72, 66,72. What is the mode of the test

A. 72

B. 86

C. 62

D. 66

**Answer: **A.72

42. Which of the curves is more peaked than the normal curve?

A. mesokurtic

B. platykurtic

C. lapokurtic

D. skewness

**Answer: **C.lapokurtic

43. What will be the range of “r” when we find that the dependent variable increases as theindependent variable increases

A. 0 to -0.05

B. 1 to 2

C. 0.1 to 1

D. 2 to 3

**Answer: **C.0.1 to 1

44. Which of the following correlation coefficients shows the highest degree of association

A. −1

B. 1

C. 0.9

D. both a & b

**Answer: **D.both a & b

45. The sum of deviations taken from arithmetic mean is

A. minimum

B. zero

C. maximum

D. none of the above is possible

**Answer: **B.zero

46. Which of the following statements is not correct

A. extreme value in data affects the mean

B. mean is also known as average

C. some data sets do not have mean

D. at times weighted mean is much better than the simple mean

**Answer: **C.some data sets do not have mean

47. Which of the following is not true in respect of mean deviation

A. it is simple to understand

B. it considers each & every item in a series

C. it is capable of further algebraic treatment

D. the extreme items have less effect on its magnitude

**Answer: **C.it is capable of further algebraic treatment

48. What is the purpose of a summary table?

A. to see differences between or among categories

B. to list data to create a bar or pie chart

C. this is the only way to present categorical data in numerical form

D. to sum the values of responses to a survey

**Answer: **A.to see differences between or among categories

49. A graphical representation of a frequency distribution is called a__________________

A. scatter diagram

B. histogram

C. time-series plot

D. stem-and-leaf plot

**Answer: **B.histogram

50. The width of a class interval in a frequency distribution (or bar chart) will beapproximately equal to the range of the data divided by the ______________ .

A. highest value in the data set

B. average of the data set

C. lowest value in the data set

D. number of class intervals

**Answer: **D.number of class intervals

51. When constructing a frequency distribution, which of the following rules must befollowed?

A. the midpoint of each class must be an integer

B. the width of each class is equal to the lowest value in the data set

C. the number of classes must be an even number

D. adjacent classes cannot overlap

**Answer: **D.adjacent classes cannot overlap

52. The rule of thumb for creating a frequency distribution is to divide the data into 5-15 classes. While larger numbers of classes allow for larger data sets, how do you know exactlyhow many classes to use

A. if in doubt about the number of classes, select 10 since it is the midpoint between 5 and 15 classes

B. select the number of classes that provides definition to the shape of the data

C. determine the width of the class interval, then calculate the number of classes

D. any number of classes between 5 and 15 is sufficient

**Answer: **B.select the number of classes that provides definition to the shape of the data

53. Considering the various types of tables and charts you have studied, which table, chart,diagram or plot would you use to depict categorical data for two variables in a visual format

A. bar chart

B. pie chart

C. scatter plot

D. contingency table

**Answer: **A.bar chart

54. For the list of values, 13, 18, 13, 14, 13, 16, 14, 21, 13, the mean, median, mode, andrange are in the order

A. 15, 13, 14, 8

B. 15, 14, 13, 8

C. 8, 15, 14, 13

D. 14, 15, 13, 8

**Answer: **B.15, 14, 13, 8

55. Arrange the numbers in numerical order and see which is repeated most often. This describes which measure of central tendency

A. mean

B. median

C. range

D. mode

**Answer: **D.mode

56. The cumulative frequency for a particular class is equal to 35. The cumulative frequency for the next class will be _________________

A. less than 35

B. equal to 65

C. 35 minus the next class frequency

D. 35 plus the next class frequency

**Answer: **D.35 plus the next class frequency

57. Which of the following would be most helpful in the construction of a pie chart

A. cumulative percentages

B. ogive

C. relative frequencies

D. frequency distribution

**Answer: **B.ogive

58. The highest bar in a histogram represents

A. the class with the lowest relative frequency

B. the class with the lowest frequency

C. the class with the highest frequency

D. the class with the highest cumulative frequency

**Answer: **C.the class with the highest frequency

59. The movie theater industry tracks ticket sales by age groups. A _______would provide anappropriate representation for the proportion of ticket sales attributed to each age group.

A. ogive

B. line graph

C. scatter diagram

D. pie chart

**Answer: **D.pie chart

60. You are constructing a histogram that is required to use 6 classes for a data set that rangesfrom 15 to 70. A class width of ____ units would be an appropriate choice

A. 9

B. 10

C. 15

D. 6

**Answer: **B.10

61. A _______ would be an effective tool to assess the relationship between the grade earnedin a class and the number of hours spent studying

A. scatter diagram

B. bar chart

C. histogram

D. pie chart

**Answer: **A.scatter diagram

62. How might an extreme value in the sample data set affect the value of the mean

A. an extreme value cannot affect the mean if it is close to the mean

B. all values are treated equally when determining the mean, so an extreme value cannot affect it

C. since all values are summed, any extreme value can influence the mean to a large extent

D. one extreme value is still only one value, so it cannot affect the mean very much

**Answer: **C.since all values are summed, any extreme value can influence the mean to a large extent

63. Which of the following is not a measure of central tendency

A. interquartile range

B. median

C. mode

D. geometric mean

**Answer: **A.interquartile range

64. Which of the following is the most appropriate measure of central tendency for ordinaldata

A. coefficient of variation

B. variance

C. median

D. mean

**Answer: **C.median

65. Which of the following measures of central tendency is not affected by extreme values inthe sample data set

A. mode

B. median

C. median and mode

D. mean

**Answer: **A.mode

66. How many elements of a data set are between the first and third quartiles

A. one half

B. one third

C. one fourth

D. three fourths

**Answer: **A.one half

67. Which of the following measures become larger as the data is more dispersed

A. median and range

B. mean, variance, and standard deviation

C. mean and median

D. range, variance, and standard deviation

**Answer: **D.range, variance, and standard deviation

68. The sum of deviations about the arithmetic mean is always equal to _______

A. 1

B. 0

C. variance

D. geometric mean

**Answer: **B.0

69. How is the arithmetic mean related to the variance

A. variance has the square of the mean in its formula

B. variance is not related to the mean, but standard deviation is

C. variance measures the variability of values about the mean

D. they are not related. one is a measure of central tendency, and the other is a measure of

**Answer: **C.variance measures the variability of values about the mean

70. Which of the following sampling techniques will not result in a probability sample?

A. stratified

B. quota

C. random

D. systematic

**Answer: **B.quota

71. The standard deviation of a sampling distribution is commonly called which of thefollowing

A. sampling deviation

B. standard margin

C. standard error

D. statistical range

**Answer: **C.standard error

72. Which of the following techniques yields a simple random sample

A. choosing volunteers from an introductory psychology class to participate

B. listing the individuals by ethnic group and choosing a proportion from within each ethnic group at random

C. numbering all the elements of a sampling frame and then using a random number table to pick cases from the table

D. randomly selecting schools, and then sampling everyone within the school

**Answer: **C.numbering all the elements of a sampling frame and then using a random number table to pick cases from the table

73. People who are available, volunteer, or can be easily recruited are used in the samplingmethod called ______

A. simple random sampling

B. cluster sampling

C. systematic sampling

D. convenience sampling

**Answer: **D.convenience sampling

74. Which of the following types of sampling involves the researcher determining the appropriate sample sizes for the groups identified as important, and then taking conveniencesamples from those groups

A. proportional stratified sampling

B. quota sampling

C. one-stage cluster sampling

D. two-stage cluster sampling

**Answer: **B.quota sampling

75. In which of the following nonrandom sampling techniques does the researcher ask theresearch participants to identify other potential research participants

A. snowball

B. convenience

C. purposive

D. quota

**Answer: **A.snowball

76. The type of sampling in which each member of the population selected for the sample isreturned to the population before the next member is selected is called _________

A. sampling without replacement

B. sampling with replacement

C. simple random sampling

D. systematic sampling

**Answer: **B.sampling with replacement

77. Which of the following is not a type of nonrandom sampling

A. cluster sampling

B. convenience sampling

C. quota sampling

D. purposive sampling

**Answer: **A.cluster sampling

78. ___________ is a set of elements taken from a larger population according to certainrules

A. sample

B. population

C. statistic

D. element

**Answer: **A.sample

79. Questionnaires can address events and characteristics taking place ______

A. in the past (retrospective questions)

B. in the present (current time questions)

C. in the future (prospective questions)

D. all of the above

**Answer: **D.all of the above

80. Which of the following terms best describes data that were originally collected at anearlier time by a different person for a different purpose

A. primary data

B. secondary data

C. experimental data

D. field notes

**Answer: **B.secondary data

81. Which of the following is true concerning observation method of data collection

A. it takes less time than self-report approaches

B. it costs less money than self-report approaches

C. it is often not possible to determine exactly why the people behave as they do

D. all of the above

**Answer: **C.it is often not possible to determine exactly why the people behave as they do

82. Correlation refers to

A. the causal relationship between two variables

B. the association between two variables

C. the proportion of variance that two variables share

D. a statistical method that can only be used with a correlational research design

**Answer: **B.the association between two variables

83. If two variables are highly correlated, what do you know

A. that they always go together

B. that high values on one variable lead to high values on the other variable

C. that there are no other variables responsible for the relationship

D. that changes in one variable are accompanied by predictable changes in the other

**Answer: **D.that changes in one variable are accompanied by predictable changes in the other

84. A researcher finds a correlation of 0.40 between personal income and the number ofyears of college completed. Based upon this finding he can conclude that

A. a person who attended four years of college will have an annual income of rs. 40,000

B. more years of education causes higher income

C. personal income is a positively skewed variable

D. more years of education are associated with higher income

**Answer: **D.more years of education are associated with higher income

85. Which of the following would not allow you to calculate a correlation?

A. a negative relationship between x and y

B. a positive relationship between x and y

C. a curvilinear relationship between x and y

D. a linear relationship between x and y

**Answer: **C.a curvilinear relationship between x and y

86. Correlation relates the relative position of a score in one distribution to

A. the relative position of a score in another distribution

B. the mean of the z-scores from another distribution

C. the total variance of all scores in both distributions

D. the standard deviation of the z-scores for both distributions

**Answer: **A.the relative position of a score in another distribution

87. If a positive correlation exists between height and weight, a person with above averageheight is expected to have above average weight

A. true

B. false

C. insufficient information to draw a conclusion

D. all of the above

**Answer: **A.true

88. Regression analysis:

A. measures the demand for a good

B. measures growth

C. establishes cause and effect

D. establishes a relationship between two variables

**Answer: **D.establishes a relationship between two variables

89. In the equation of a straight line, Y = mX + c the term, m is the:

A. independent variable

B. intercept

C. dependent variable

D. slope

**Answer: **D.slope

90. In the equation of a straight line, Y = mX + c , if c is equal to zero then:

A. the line of best fit passes through the origin

B. the line of best fit cuts the x axis to the right of the y axis

C. does not cross the x axis

D. the line of best fit cuts the x axis to the left of the y axis

**Answer: **A.the line of best fit passes through the origin

91. In the equation of a straight line, Y = mX + c , if m is equal to −2 then:

A. there is a positive relationship between the two variables

B. there is no relationship between the two variables

C. there is a negative relationship between the two variables

D. the relationship between the two variables is perfect

**Answer: **C.there is a negative relationship between the two variables

92. In the equation of a straight line, Y = mX + c , if m is equal to zero then when:

A. x increases y decreases

B. y increases x increases

C. x increases y increases

D. x increases y remains constant

**Answer: **D.x increases y remains constant

93. If the Pearson correlation co-efficient R is equal to 1 then:

A. there is a perfect positive relationship between the two variables

B. there is a positive relationship between the two variables

C. there is no relationship between the two variables

D. there is a negative relationship between the two variables

**Answer: **A.there is a perfect positive relationship between the two variables

94. The mathematical notation R2is for:

A. the co-efficient of determination

B. the co-efficient of variation

C. spearman’s co-efficient of rank correlation

D. pearson’s co-efficient of correlation

**Answer: **A.the co-efficient of determination

95. If the slope of the regression line is calculated to be 2.5 and the intercept 16 then thevalue of Y when X is 4 is:

A. 16

B. 66.5

C. 2.5

D. 26

**Answer: **D.26

96. If Spearman’s co-efficient of rank correlation is equal to one, then:

A. all the ‘total variation’ is ‘explained’ by the regression line

B. the rankings of the two variables partially agree

C. the rankings of the two variables is totally different

D. the rankings of the two variables totally agree

**Answer: **D.the rankings of the two variables totally agree

97. The correlation coefficient is used to determine:

A. a specific value of the y-variable given a specific value of the x-variable

B. a specific value of the x-variable given a specific value of the y-variable

C. the strength of the relationship between the x and y variables

D. none of these

**Answer: **C.the strength of the relationship between the x and y variables

98. If there is a very strong correlation between two variables then the correlationcoefficient must be

A. any value larger than 1

B. much smaller than 0, if the correlation is negative

C. much larger than 0, regardless of whether the correlation is negative or positive

D. none of these alternatives is correct

**Answer: **B.much smaller than 0, if the correlation is negative

99. In regression, the equation that describes how the response variable (y) is related to theexplanatory variable (x) is:

A. the correlation model

B. the regression model

C. used to compute the correlation coefficient

D. none of these alternatives is correct

**Answer: **B.the regression model

100. Regression modelling is a statistical framework for developing a mathematical equationthat describes how

A. one explanatory and one or more response variables are related

B. several explanatory and several response variables response are related

C. one response and one or more explanatory variables are related

D. all of these are correct

**Answer: **C.one response and one or more explanatory variables are related

101. A ______ is a value that may change within the scope of a given problem or set ofoperations

A. constant

B. variable

C. function

D. exponent

**Answer: **B.variable

102. __________ variable is a factor that is not itself under study but affects the measurementof the study variables or the examination of their relationships.

A. exogenous

B. endogenous

C. extraneous

D. dependent

**Answer: **C.extraneous

103. An index number is used:

A. to measure changes in quantity

B. to measure changes in demand

C. to measure changes in a variable over time

D. to measure changes in price

**Answer: **C.to measure changes in a variable over time

104. The ratio of a new price to the base year price is called the:

A. price absolute

B. price decrease

C. price increase

D. price relative

**Answer: **D.price relative

105. A simple aggregate quantity index is used to:

A. measure the change in price of a product

B. measure the change in quantity of a product

C. measure the overall change in quantity of a range of products

D. measure the overall change in price of a range of products

**Answer: **D.measure the overall change in price of a range of products

106. A simple aggregate price index:

A. ignores relative quantities

B. compares relative quantities to relative prices

C. considers relative quantities

D. compares absolute prices to absolute quantities

**Answer: **A.ignores relative quantities

107. This index measures the change from month to month in the cost of a representative‘basket’ of goods and services of the type bought by a typical household

A. paasche price index

B. retail price index

C. laspeyres price index

D. financial times index

**Answer: **B.retail price index

108. The Laspeyres and Paasche index are examples of:

A. weighted price index only

B. aggregate index numbers

C. weighted index numbers

D. weighted quantity index only

**Answer: **C.weighted index numbers

109. The Laspeyres price index:

A. regards the current year quantities as fixed

B. regards the base year quantities as fixed

C. regards the base year prices as fixed

D. regards the current quality as fixed

**Answer: **B.regards the base year quantities as fixed

110. A scaling factor is used to:

A. change a simple index to a weighted index

B. convert the paasche index to a laspeyres index

C. change an aggregate index to a weighted index

D. change the base year

**Answer: **D.change the base year

111. The distinctive feature of the ______ index is that it uses a group of commoditiespurchased in the base period as the basis for comparison

A. paasche’s

B. laspeyres

C. fisher’s

D. dorbish-bowley

**Answer: **B.laspeyres

112. ________was developed to measure changes in the cost of living in order to determinethe wage increases necessary to maintain a constant standard of living.

A. price index

B. sensex

C. correlation

D. regression

**Answer: **A.price index

113. ____________ measure of living costs based on changes in retail prices

A. correlation

B. whole sale price index

C. consumer price index

D. regression

**Answer: **C.consumer price index

114. Paasche index was developed by ______economist Hermann Paasche for measuringcurrent price or quantity levels relative to those of a selected base period

A. american

B. british

C. australian

D. german

**Answer: **D.german

115. The ratio-moving-average procedure can be used to deseasonalize data

A. true

B. false

C. either of the above

D. none of the above

**Answer: **A.true

116. The weighing factor, used in the exponential smoothing method, is always a numberbetween ______

A. zero and ten

B. five and ten

C. zero and one

D. zero and negative one

**Answer: **C.zero and one

117. A moving average of a time series is the value around which a series moves over time.

A. true

B. false

C. either of the above

D. none of the above

**Answer: **B.false

118. In a time series analysis it is often important to analyze seasonal variations

A. true

B. false

C. either of the above

D. none of the above

**Answer: **A.true

119. The index number for the price of a good in 2002 was 142 and in 2003, it was 148.5, ona base year of 1994. What is the percent increase in price of gasoline from 2002 to 2003

A. 4.377%

B. 4.577%

C. 95.62%

D. 6.5%

**Answer: **B.4.577%

120. Which one of the following is not a component of the multiplicative time series model?

A. trend

B. irregular variation

C. regression trend

D. seasonality

**Answer: **C.regression trend

121. Which of the following is not a component of the multiplicative time series model?

A. trend analysis

B. seasonal variation

C. cyclical variation

D. regressive variation

**Answer: **D.regressive variation

122. The time series component that indicates a steady increase or decrease over time isknown as a ____________

A. order

B. pattern

C. trend

D. seasonality

**Answer: **C.trend

123. A pattern in a times-series model that occurs over a duration of more than a year iscalled a ___________ variation

A. trend

B. seasonal

C. cyclical

D. regressive

**Answer: **C.cyclical

124. Which two components are smoothed out by the moving average

A. seasonality and irregular

B. cyclicality; seasonality

C. variability: randomality

D. randomality; seasonality

**Answer: **A.seasonality and irregular

125. If a value is missing in a time series we can do one of the following

A. just copy the previous value

B. estimate it as an average between two neighbouring values

C. take the overall mean as the best estimate of it

D. ignore it

**Answer: **B.estimate it as an average between two neighbouring values

126. One of the classifications of time series is that they can be either

A. categorical or ordinal

B. stationary or non-stationary

C. inflationary or non-inflationary

D. increasing or decreasing

**Answer: **B.stationary or non-stationary

127. Another name for the regression method is

A. linear method

B. univariate method

C. time series method

D. causal method

**Answer: **D.causal method

128. Exponential smoothing is

A. a method to use number exponents to smooth the time series

B. one of the forecasting methods

C. a method of testing linearity

D. a method to find elasticity

**Answer: **B.one of the forecasting methods

129. “Sensex” is related to

A. bse

B. nse

C. rbi

D. sebi

**Answer: **A.bse

130. Which of the following is not one of the four types of variation that is estimated in time- series analysis

A. predictable

B. trend

C. cyclical

D. irregular

**Answer: **A.predictable

131. The cyclical component of time-series data is usually estimated using

A. linear regression analysis

B. moving averages

C. exponential smoothing

D. qualitative methods

**Answer: **D.qualitative methods

132. In time-series analysis, which source of variation can be estimated by the ratio-to-trendmethod

A. cyclical

B. trend

C. seasonal

D. irregular

**Answer: **C.seasonal

133. If regression analysis is used to estimate the linear relationship between the naturallogarithm of the variable to be forecast and time, then the slope estimate is equal to

A. the linear trend

B. the natural logarithm of the rate of growth

C. the natural logarithm of one plus the rate of growth

D. the natural logarithm of the square root of the rate of growth

**Answer: **C.the natural logarithm of one plus the rate of growth

134. The use of a smoothing technique is appropriate when

A. random behaviour is the primary source of variation

B. seasonality is present

C. data exhibit a strong trend

D. all of the above are correct

**Answer: **A.random behaviour is the primary source of variation

135. Barometric methods are used to forecast

A. seasonal variation

B. secular trend

C. cyclical variation

D. irregular variation

**Answer: **C.cyclical variation

136. A single-equation econometric model of the demand for a product is a ________equation in which the quantity demanded of the product is an ________ variable

A. structural, exogenous

B. structural, endogenous

C. definitional, exogenous

D. definitional, endogenous

**Answer: **B.structural, endogenous

137. Econometric forecasts require

A. accurate estimates of the coefficients of structural equations

B. forecasts of future values of exogenous variables

C. appropriate theoretical models

D. all of the above

**Answer: **D.all of the above

138. Laspeyre’s formula does not obey

A. factor reversal test

B. time reversal test

C. circular test

D. none

**Answer: **B.time reversal test

139. P10 is the index for time

A. 1 on 0

B. 0 on 1

C. 1 on 1

D. b) 0 on 0

**Answer: **B.0 on 1

140. Fisher’s Ideal Formula for calculating index nos. satisfies the________ tests

A. units test

B. factor reversal test

C. both a and b

D. do not satisfy any test

**Answer: **C.both a and b

141. _______________ is particularly suitable for the construction of index nos

A. harmonic mean

B. arithmetic mean

C. geometric mean

D. none

**Answer: **C.geometric mean

142. The________ of group indices given the General Index

A. harmonic mean

B. arithmetic mean

C. geometric mean

D. none of the above

**Answer: **B.arithmetic mean

143. In computing Index Numbers, ___________ is concerned with the measurement of pricechanges over a period of years, when it is desirable to shift the base

A. unit test

B. circular test

C. time reversal test

D. none of the above

**Answer: **B.circular test

144. Index nos. are often constructed from the

A. frequency

B. class

C. sample

D. none

**Answer: **C.sample

145. The formula should be independent of the unit in which or for which price and quantitiesare quoted in

A. unit test

B. time reversal test

C. factor reversal test

D. none of the above

**Answer: **A.unit test

146. Factor Reversal test is satisfied by

A. fisher\s ideal index

B. laspeyres index

C. paasches index

D. none of the above

**Answer: **A.fisher\s ideal index

147. The index no. is a special type of average

A. false

B. true

C. both

D. none

**Answer: **B.true

148. Laspeyre’s method and Paasche’s method do not satisfy

A. unit test

B. time reversal test

C. factor reversal test

D. none of the above

**Answer: **B.time reversal test

149. We use price index numbers

A. to measure and compare prices

B. to measure prices

C. to compare prices

D. none of the above

**Answer: **A.to measure and compare prices

150. Simple aggregate of quantities is a type of

A. quantity control

B. quantity indices

C. both

D. none of the above

**Answer: **B.quantity indices

151. The test of shifting the base is called

A. unit test

B. time reversal test

C. circular test

D. none of the above

**Answer: **C.circular test

152. Price relative is equal to

A. ×

B. ×

C. ℎ × 100

D. ℎ × 100

**Answer: **A.×

153. The price relative is a price index that is determined by

A. (price in period t/base period price)(100)

B. (base period price/price in period t)(100)

C. (price in period t + base period price)(100)

D. none of the above

**Answer: **A.(price in period t/base period price)(100)

154. A composite price index based on the prices of a group of items is known as the

A. laspeyres index

B. paasche index

C. aggregate price index

D. consumer price index

**Answer: **C.aggregate price index

155. A weighted aggregate price index where the weight for each item is its base periodquantity is known as the

A. paasche index

B. consumer price index

C. producer price index

D. laspeyres index

**Answer: **D.laspeyres index

156. A monthly price index that uses the price changes in consumer goods and services formeasuring the changes in consumer prices over time is known as the

A. paasche index

B. consumer price index

C. producer price index

D. laspeyres index

**Answer: **B.consumer price index

157. A monthly price index that measures the changes in the prices of goods sold in a primarymarket is known as the

A. consumer price index

B. quantity index

C. index of industrial production

D. producer price index

**Answer: **D.producer price index

158. A composite price index where the prices of the items in the composite are weighted bytheir relative importance is known as the

A. price relative

B. weighted aggregate price index

C. consumer price index

D. none of the above

**Answer: **B.weighted aggregate price index

159. An index that is designed to measure changes in quantities over time is known as the

A. time index

B. quantity index

C. paasche index

D. change index

**Answer: **B.quantity index

160. A quantity index that is designed to measure changes in physical volume or productionlevels of industrial goods over time is known as the

A. physical volume index

B. time index

C. index of industrial production and capacity utilization

D. none of the above

**Answer: **C.index of industrial production and capacity utilization

161. The term econometrics was coined by

A. marsahll

B. pawel

C. ragnar frisch

D. pareto

**Answer: **C.ragnar frisch

162. Econometrics model is ___________model

A. exogenous

B. endogenous

C. identified

D. either exogenous or endogenous

**Answer: **D.either exogenous or endogenous

163. The starting point of econometric analysis is

A. model specification

B. formulation of alternative hypothesis

C. formulation of null hypothesis

D. collection of data

**Answer: **C.formulation of null hypothesis

164. Regressor refers to

A. independent variable

B. dependent variable

C. error term

D. dummy variable

**Answer: **A.independent variable

165. In perfect linear model, we assume that regression coefficient remains _________

A. variable until some point

B. variable through out

C. constant to some point

D. constant through out

**Answer: **D.constant through out

166. In econometric models, t+1 indicates,

A. net addition

B. current value with some fluctuations

C. expected value

D. none of these

**Answer: **C.expected value

167. When a north Indian town data and south Indian data are totalled, it leads to the problemof _________aggregation.

A. national

B. regional

C. spatial

D. heterogeneous

**Answer: **C.spatial

168. Among the following, which is an assumption of OLS

A. the explanatory variables are measurable

B. the relationship being estimated is identified

C. error term and independent variables are related

D. error term and independent variables are linearly related

**Answer: **B.the relationship being estimated is identified

169. The property of average or expected value is equal to true value of the coefficient is theproperty of

A. zero variance

B. minimum variance

C. zero mean

D. minimum mean

**Answer: **B.minimum variance

170. The power of a statistical test is defined as,

A. 1−β

B. 1 + β

C. 1

D. β

**Answer: **A.1−β

171. Standard error is defined as,

A. standard deviation of the sampling distribution

B. standard deviation of the population

C. variance of the sampling distribution

D. variance of the population

**Answer: **A.standard deviation of the sampling distribution

172. Student t test is preferred in the case of a,

A. large sample

B. small sample

C. when sample is below 50

D. when sample is above 50

**Answer: **B.small sample

173. Cobb Douglas production function is an example of

A. linear model

B. double log model

C. lin log model

D. log lin model

**Answer: **B.double log model