# ISS (Statistical Services) Statistics Paper III: Questions 80 - 85 of 109

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## Question 80

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Appeared in Year: 2013

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Essay▾

Describe the principles of stratification. Explain how the allocation of sample size in different strata is made.

### Explanation

Principles of stratification:

The principle of stratification is the division of the population in such a way that the elements within a stratum are as similar as possible and the means of the strata are as different as possible.

Auxiliary information (past or some other information) related to the character under study may be used to divide the popu&#8230;

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## Question 81

Determination of Trend, Seasonal and Cyclical Fluctuations
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Appeared in Year: 2013

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Essay▾

Discuss various steps of finding adjusted monthly indices of seasonal variations using link relative method.

### Explanation

Steps of finding adjusted monthly indices of seasonal variations using link relative method:

(i) Find the link relative of all the seasonal data using the formulae

Where = link relative of the current season

(ii) Arrange the entire link relatives thus obtained season wise and find the seasonal average of such link relatives by either mean or median.

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## Question 82

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Appeared in Year: 2014

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Essay▾

Define price elasticity of demand and income elasticity of demand. Point out their uses in economic analysis.

### Explanation

Price elasticity of demand:

Price elasticity of demand is a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price.

Price elasticity of demand shows the sensitiveness or responsiveness of demand to the change in price.

Price elasticity of demand is defined as the value of the ratio of the p&#8230;

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## Question 83

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Appeared in Year: 2014

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Essay▾

Define linear systematic sampling. Does it give equal probability of selection to all the population units? State the advantages and limitations of systematic sampling. Can a systematic sample be drawn without a physical list of population units? Justify your claim.

### Explanation

Linear systematic sampling:

Linear systematic sampling is a commonly employed technique if the complete and up-to date list of the sampling units is available. This consists in selecting only the first unit at random, the rest being automatically selected according to some predetermined pattern involving regular spacing of units.

Let us Suppose that &#8230;

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## Question 84

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Appeared in Year: 2014

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Essay▾

Describe the problem of ‘multicollinearity’ in econometrics and explain how will you detect it.

### Explanation

Multicollinearity may arise for various reasons, they are:

There is a tendency of economic variables to move together over time. In time series data, growth and trend factors are the main causes for multicollinearity problem. For example, in period of booms or rapid economic growth the basic economic magnitudes grow. The income, consumption, savings&#8230;

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## Question 85

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Appeared in Year: 2014

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Essay▾

Define Laspeyres ‘and Paasche՚s index numbers. It is sometimes stated that Laspeyres’ price index number tends to overestimate price changes while Paasche՚s price index number tends to underestimate them. Justify or refute the above statement giving reasons.

### Explanation

Laspeyre՚s Index Number:

Laspeyre՚s index number is a index number where the base year quantities are taken as weights. Under this method, we get the weighted index on the basis of aggregative expenditure, assuming that the quantities consumed in the base year are also the quantities consumed in the current year.

where

= Lasperey՚s index of the curre&#8230;

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