IMPORTANT QUESTIONS AND ANSWERS

1. What is coefficient of correlation ?

Ans : coefficient of correlation is an algebraic method of measuring correlation .correlation
of coefficient is a numeric value . it shows the degree of correlation between 2 variables .
2. Index number is known as the economic barometer ? comment
Ans : index number are used as an indicator of general economic behaviour . it is used to
determine the general trend in business . it is also used to feel the pulse of economy
3. Define time series ?
Ans : time series is the arrangement of a statistical data in accordance with time of its
occurrence
4. What is perfect correlation ?
Ans : correlation is said to be perfect when a change in one variable is always followed by a
corresponding proportional change in the other .if this change is in the same direction it is
said to be perfect positive correlation .
5. What is regression analysis ?
Ans : regression analysis is used to study the relationship between 2 or more variables . the
regression technique is used to observe changes in the dependent variable with the change
in the independent .
6. Define index number ?
Ans : an index number is a statistical device for measuring changes in the magnitude of a
group of related variables on a particular date in comparison to their level on some previous
date .
7. What is probability ?
Ans : probability is the numerical value of the possibility of the occurrence of uncertain
events .eg when we toss a coin the probability of getting head is ½
8. For 10 observation on price (x) and supply (y) the following data was obtained ∑x=130 ,
∑y=220 , ∑x2=2288, ∑y2=5506 ,∑xy =3467 . obtain the line of regression and estimate the
supply when the price is 16 units
Ans :

9. What is scatter diagram ?

Ans : scatter diagram is a graphical method of finding out correlation between two variables
. this is the simplest method of finding out the relationship between 2 variable . in this
method the given data are plotted on a graph paper in the form of dots .
10. Calculate the rank correlation ?
X : 70 65 71 62 58 69 78 64
Y : 91 76 65 83 90 64 55 48
 Ans :

11. Calculate co efficient of correlation between x and y ?

X:2 4 6 8
Y : 5 9 13 17
Ans :

12. State the major problems faced in the construction of consumer price index ?
• Purpose of index : failure to decide clearly the purpose of index , would lead to
confusion and wastage of time
• Selection of the base period : every index number should have a base period . base
period is the time period with which comparison of relative changes are made
• Selection of number of items : it is necessary to decide what item to be included
• Obtaining price quotations : price of many commodities vary from place to place and
even from shop to shop in the same market . so price quotations should be obtained
from a sample of markets .
• Selection of an average : a decision is to be taken as to which average should be used for
construction of the index
• Selection of weight : the problem of selecting suitable weight is quite important and at
the same time quite difficult to decide
13. Difference between correlation and regression ?
Ans :
Correlation Regression
Degree of relation Nature of relationship
Not for the purpose of prediction Used for prediction purpose
Only one coefficient Two coefficient
Not imply cause and effect relationship Indicate the cause and effect relationship

14. You are given the following data :

X Y
Arithmetic mean 36 85
Standard deviation 11 8
Co efficient of correlation 0.66
Find the 2 regression equation and estimate the value of X when Y =75
Ans :

15. From the following data of wholesale prices of a certain commodity , construct index
numbers by chain base method
Year : 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Price : 750 500 650 600 720 700 690 750 840 800
Other important questions
1. Fishers index number
2. Coefficient of correlation , karl pearsons coefficient of correlation
3. Coefficient of rank correlation
4. Calculate simple index number
5. Most important module correlation , regression , index number