Which statement describes a quantity index number?
Correct answer: C. It measures changes in physical quantities
- A. It measures changes in total expenditure
- B. It measures changes in commodity prices
- C. It measures changes in physical quantities
- D. It measures changes in purchasing power
Explanation
A quantity index measures changes in the physical volume of goods or services, such as production or consumption. A price index focuses on prices, while a value index combines price and quantity changes.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Index Numbers
Index numbers measure relative changes in prices, quantities or values over time using a base period. Work includes simple and weighted price indices, aggregate methods, consumer price calculations, percentage change and purchasing power, with attention to choosing a base year and interpreting an index rather than treating it as an absolute amount.
Practise Index Numbers
30 free Index Numbers MCQs from Quantitative Methods, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Quantitative Methods questions like this
Quantitative Methods is on this paper prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for it.
More Index Numbers questions
The Dorbish-Bowley price index is calculated as the:
Fisher's price index is obtained by taking the:
In the construction of an index number, the value assigned to the base period is usually:
If a price index increases from 100 to 128, the percentage increase in prices is:
A desirable technical property of an index number is that its value should not change merely because the units of measurement change. This property is called the:
The factor reversal test for index numbers requires that the product of the price index and quantity index equal the: