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

1

(a)

Weighted Index

(b)

Simple Aggregative Index

(c)

Simple Average of relatives

In most of the weighted index numbers, weight pertains to:

1

(a)

Base Year

(b)

Current Year

(c)

Both base Year and Current Year

A consumer price index measures changes in:

1

(a)

Wholesale Price

(b)

Consumer Price

(c)

Producer's Price

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

1

(a)

Food

(b)

Housing

(c)

Clothing

In general, inflation is calculated by using:

1

(a)

Wholesale Price Index

(b)

Consumer Price Index

(c)

Producer's Price Index

What are the desirable properties of the base period?

3

(a)

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

3

(a)

What does a consumer price index for industrial workers measure?

3

(a)

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

3

(a)

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

3

(a)

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	100	200
Clothing	20	25
Fuel and Lighting	15	20
House Rent	30	40
Misc	35	65

3

(a)

Read the following table carefully and give your comments.

Index of Industrial Production with Base 1993-94
Industry	Weight in %	1996-1997	2003-2004
General Index	100	130.8	189.0
Mining and Quarrying	10.73	118.2	146.9
Manufacturing	78.58	133.6	196.6
Electricity	10.69	122.0	172.6

3

(a)

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

3

(a)

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?

3

(a)

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?

3

(a)

Given the following data:

Year	CPI of industrial Workers  (1982 = 100)	CPIofurban Non-Manual employees  (1984-85 = 100)	CPl of Agricultural Labourers  (1986-87 = 100)	WPI  (1993-94 = 100)
1995-96	313	257	234	121.6
1996-97	342	283	256	127.2
1997-98	366	302	264	132.8
1998-99	414	337	293	140.7
1999-00	428	352	306	145.3
2000-01	444	352	306	155.7
2001-02	463	390	309	161.3
2002·03	482	405	319	166.8
2003-04	500	420	331	175.9

Source: economic survey, government of India. 2004-05
(i) Calculate the inflation rates using different index numbers.
(ii) Comment on the relative values of the index numbers.
(iii) Are they comparable?

3

(a)

Why do we need an index number?

6

(a)

Is the change in price reflected in price index number?

6

(a)