Time Series Analysis MBA 1st Year Semester Very Short Question Answer Notes

Q.6. What are the characteristics of index numbers?

Ans. The characteristics of index numbers are:

1. These are expressed in percentage.
2. These are relative measures.
3. Index numbers are specialized averages.
4. Index numbers measure charges which are not directly measurable.

Q.7. what are the advantages of index numbers?

Ans. The advantages of index numbers are:

1. To get information about the changes in the internal price level.
2. Increase or decrease in foreign trade.
3. Knowledge about the changes in the cost of living in the country.
4. Information about production trends in the country.

Q.8. What are the objectives of the consumer price Index?

Ans. The Objectives of the consumer price index are:

1. To measure the impact of price change in purchasing power.
2. To track inflation.
3. To control inflation with the help of monetary policy to take decisions.

Q.9. What are the advantages of chain base index numbers?

Ans. Chain base index number has the following advantages:

1. To introduce new items and omit old items.
2. Free from seasonal variations.
3. Presents a general picture of movements over a period of time.

Q.10. What are the disadvantages of chain base index numbers?

Ans. The disadvantages of chain base index number are:

1. Long-range comparisons of chained percentages are computed from link relatives.
2. It does not present any specific picture of the movements over a period of time.