Quantitative Methods for Economic Analysis 1 | Set 2
1. A ______ is a value that may change within the scope of a given problem or set of
operations
Correct : B. variable
2. __________ variable is a factor that is not itself under study but affects the measurement
of the study variables or the examination of their relationships.
Correct : C. extraneous
3. An index number is used:
Correct : C. to measure changes in a variable over time
4. The ratio of a new price to the base year price is called the:
Correct : D. price relative
5. A simple aggregate quantity index is used to:
Correct : D. measure the overall change in price of a range of products
6. A simple aggregate price index:
Correct : A. ignores relative quantities
7. 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
Correct : B. retail price index
8. The Laspeyres and Paasche index are examples of:
Correct : C. weighted index numbers
9. The Laspeyres price index:
Correct : B. regards the base year quantities as fixed
10. A scaling factor is used to:
Correct : D. change the base year
11. The distinctive feature of the ______ index is that it uses a group of commodities
purchased in the base period as the basis for comparison
Correct : B. laspeyres
12. ________was developed to measure changes in the cost of living in order to determine
the wage increases necessary to maintain a constant standard of living.
Correct : A. price index
13. ____________ measure of living costs based on changes in retail prices
Correct : C. consumer price index
14. Paasche index was developed by ______economist Hermann Paasche for measuring
current price or quantity levels relative to those of a selected base period
Correct : D. german
15. The ratio-moving-average procedure can be used to deseasonalize data
Correct : A. true
16. The weighing factor, used in the exponential smoothing method, is always a number
between ______
Correct : C. zero and one
17. A moving average of a time series is the value around which a series moves over time.
Correct : B. false
18. In a time series analysis it is often important to analyze seasonal variations
Correct : A. true
19. The index number for the price of a good in 2002 was 142 and in 2003, it was 148.5, on
a base year of 1994. What is the percent increase in price of gasoline from 2002 to 2003
Correct : B. 4.577%
20. Which one of the following is not a component of the multiplicative time series model?
Correct : C. regression trend
21. Which of the following is not a component of the multiplicative time series model?
Correct : D. regressive variation
22. The time series component that indicates a steady increase or decrease over time is
known as a ____________
Correct : C. trend
23. A pattern in a times-series model that occurs over a duration of more than a year is
called a ___________ variation
Correct : C. cyclical
24. Which two components are smoothed out by the moving average
Correct : A. seasonality and irregular
25. If a value is missing in a time series we can do one of the following
Correct : B. estimate it as an average between two neighbouring values
26. One of the classifications of time series is that they can be either
Correct : B. stationary or non-stationary
27. Another name for the regression method is
Correct : D. causal method
28. Exponential smoothing is
Correct : B. one of the forecasting methods
29. “Sensex” is related to
Correct : A. bse
30. Which of the following is not one of the four types of variation that is estimated in time- series analysis
Correct : A. predictable
31. The cyclical component of time-series data is usually estimated using
Correct : D. qualitative methods
32. In time-series analysis, which source of variation can be estimated by the ratio-to-trend
method
Correct : C. seasonal
33. If regression analysis is used to estimate the linear relationship between the natural
logarithm of the variable to be forecast and time, then the slope estimate is equal to
Correct : C. the natural logarithm of one plus the rate of growth
34. The use of a smoothing technique is appropriate when
Correct : A. random behaviour is the primary source of variation
35. Barometric methods are used to forecast
Correct : C. cyclical variation
36. 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
Correct : B. structural, endogenous
37. Econometric forecasts require
Correct : D. all of the above
38. Laspeyre's formula does not obey
Correct : B. time reversal test
39. P10 is the index for time
Correct : B. 0 on 1
40. Fisher's Ideal Formula for calculating index nos. satisfies the________ tests
Correct : C. both a and b
41. _______________ is particularly suitable for the construction of index nos
Correct : C. geometric mean
42. The________ of group indices given the General Index
Correct : B. arithmetic mean
43. In computing Index Numbers, ___________ is concerned with the measurement of price
changes over a period of years, when it is desirable to shift the base
Correct : B. circular test
44. Index nos. are often constructed from the
Correct : C. sample
45. The formula should be independent of the unit in which or for which price and quantities
are quoted in
Correct : A. unit test
46. Factor Reversal test is satisfied by
Correct : A. fisher\s ideal index
47. The index no. is a special type of average
Correct : B. true
48. Laspeyre's method and Paasche's method do not satisfy
Correct : B. time reversal test
49. We use price index numbers
Correct : A. to measure and compare prices
50. Simple aggregate of quantities is a type of
Correct : B. quantity indices
51. The test of shifting the base is called
Correct : C. circular test
52. Price relative is equal to
Correct : A. ×
53. The price relative is a price index that is determined by
Correct : A. (price in period t/base period price)(100)
54. A composite price index based on the prices of a group of items is known as the
Correct : C. aggregate price index
55. A weighted aggregate price index where the weight for each item is its base period
quantity is known as the
Correct : D. laspeyres index
56. A monthly price index that uses the price changes in consumer goods and services for
measuring the changes in consumer prices over time is known as the
Correct : B. consumer price index
57. A monthly price index that measures the changes in the prices of goods sold in a primary
market is known as the
Correct : D. producer price index
58. A composite price index where the prices of the items in the composite are weighted by
their relative importance is known as the
Correct : B. weighted aggregate price index
59. An index that is designed to measure changes in quantities over time is known as the
Correct : B. quantity index
60. A quantity index that is designed to measure changes in physical volume or production
levels of industrial goods over time is known as the
Correct : C. index of industrial production and capacity utilization
61. The term econometrics was coined by
Correct : C. ragnar frisch
62. Econometrics model is ___________model
Correct : D. either exogenous or endogenous
63. The starting point of econometric analysis is
Correct : C. formulation of null hypothesis
64. Regressor refers to
Correct : A. independent variable
65. In perfect linear model, we assume that regression coefficient remains _________
Correct : D. constant through out
66. In econometric models, t+1 indicates,
Correct : C. expected value
67. When a north Indian town data and south Indian data are totalled, it leads to the problem
of _________aggregation.
Correct : C. spatial
68. Among the following, which is an assumption of OLS
Correct : B. the relationship being estimated is identified
69. The property of average or expected value is equal to true value of the coefficient is the
property of
Correct : B. minimum variance
70. The power of a statistical test is defined as,
Correct : A. 1−β
71. Standard error is defined as,
Correct : A. standard deviation of the sampling distribution
72. Student t test is preferred in the case of a,
Correct : B. small sample
73. Cobb Douglas production function is an example of