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The quantity Index number using Fisher’s formula satisfies :
- a)Unit Test
- b)Factor Reversal Test.
- c)Circular Test.
- d)Time Reversal Test.
Correct answer is option 'B,D'. Can you explain this answer?
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The quantity Index number using Fisher’s formula satisfies :a)Un...
Correct Answer :- d
Explanation : The time reversal test requires that the index for the later period based on the earlier period should be the reciprocal of that for the earlier period based on the later period; one of the desirable features of the “Fisher Ideal” price and volume indexes.
Fisher’s method satisfies both the time reversal test and factor reversal test. Hence it is called the ideal index number. Another test of the adequacy of the index number formula is what is known as ‘circular test’.
Fisher’s method satisfies both the time reversal test and factor reversal test. Hence it is called the ideal index number. Another test of the adequacy of the index number formula is what is known as ‘circular test’.
Most Upvoted Answer
The quantity Index number using Fisher’s formula satisfies :a)Un...
The Fisher index number is used to calculate the change in the price of a particular commodity or a group of commodities over time. It is also known as the ideal index number or the geometric mean index number. The formula for Fisher Index number is as follows:
Fisher Index = √(P1Q1 * P2Q2)
Where,
P1 and P2 are the prices of the commodity in the two periods respectively,
Q1 and Q2 are the quantities of the commodity in the two periods respectively.
The Fisher Index number is calculated by multiplying the prices and quantities of the commodity in two periods and taking the square root of the product. This index number takes into account both the changes in prices and the changes in quantities of the commodity over time. It is considered to be a more accurate measure of price changes than other index numbers like Laspeyres or Paasche, which only consider changes in prices or quantities respectively.
Fisher Index = √(P1Q1 * P2Q2)
Where,
P1 and P2 are the prices of the commodity in the two periods respectively,
Q1 and Q2 are the quantities of the commodity in the two periods respectively.
The Fisher Index number is calculated by multiplying the prices and quantities of the commodity in two periods and taking the square root of the product. This index number takes into account both the changes in prices and the changes in quantities of the commodity over time. It is considered to be a more accurate measure of price changes than other index numbers like Laspeyres or Paasche, which only consider changes in prices or quantities respectively.
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The quantity Index number using Fisher’s formula satisfies :a)Un...
Option b)and d)both are correct.
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The quantity Index number using Fisher’s formula satisfies :a)Unit Testb)Factor Reversal Test.c)Circular Test.d)Time Reversal Test.Correct answer is option 'B,D'. Can you explain this answer?
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