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Circular test, an index constructed for the year ‘x’ on the base year ‘y’ and for the year ‘y’ on the base year ‘z’ should yield the same result as an index constructed for ‘x’ on base year ‘z’ i.e. I0,1 x I1,2 x I2,0 equal is :
- a)3
- b)2
- c)1
- d)None of these
Correct answer is option 'C'. Can you explain this answer?
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Circular test, an index constructed for the year x on the base year y ...
Circular Test:
Circular test is a statistical concept that states that an index constructed for a year x on the base year y and for the year y on the base year z should yield the same result as an index constructed for x on base year z.
Formula:
I0,1 x I1,2 x I2,0 = 1
Explanation:
- I0,1 represents the index constructed for year x on the base year y.
- I1,2 represents the index constructed for year y on the base year z.
- I2,0 represents the index constructed for year x on the base year z.
The above formula states that if we multiply the three indices, the result should be equal to 1. This is because the three indices together represent a complete chain of comparison of prices over three different time periods.
For example, let's say we want to calculate the inflation rate between year x and year z. We can do this by using the circular test formula:
- Calculate the index for year x on base year y (I0,1)
- Calculate the index for year y on base year z (I1,2)
- Calculate the index for year x on base year z (I2,0)
- Multiply the three indices: I0,1 x I1,2 x I2,0
- The result should be equal to 1. If it's not, then there is a problem with the data or the calculations.
Conclusion:
Circular test is an important concept in statistics that helps ensure the accuracy of price indices and inflation rates. It is used to check the consistency of different indices calculated using different base years. The formula for circular test is I0,1 x I1,2 x I2,0 = 1, which should always hold true if the data and calculations are correct.
Circular test is a statistical concept that states that an index constructed for a year x on the base year y and for the year y on the base year z should yield the same result as an index constructed for x on base year z.
Formula:
I0,1 x I1,2 x I2,0 = 1
Explanation:
- I0,1 represents the index constructed for year x on the base year y.
- I1,2 represents the index constructed for year y on the base year z.
- I2,0 represents the index constructed for year x on the base year z.
The above formula states that if we multiply the three indices, the result should be equal to 1. This is because the three indices together represent a complete chain of comparison of prices over three different time periods.
For example, let's say we want to calculate the inflation rate between year x and year z. We can do this by using the circular test formula:
- Calculate the index for year x on base year y (I0,1)
- Calculate the index for year y on base year z (I1,2)
- Calculate the index for year x on base year z (I2,0)
- Multiply the three indices: I0,1 x I1,2 x I2,0
- The result should be equal to 1. If it's not, then there is a problem with the data or the calculations.
Conclusion:
Circular test is an important concept in statistics that helps ensure the accuracy of price indices and inflation rates. It is used to check the consistency of different indices calculated using different base years. The formula for circular test is I0,1 x I1,2 x I2,0 = 1, which should always hold true if the data and calculations are correct.
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Circular test, an index constructed for the year x on the base year y and for the year y on the base year z should yield the same result as an index constructed for x on base year z i.e. I0,1 x I1,2 x I2,0 equal is :a)3b)2c)1d)None of theseCorrect answer is option 'C'. Can you explain this answer?
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Circular test, an index constructed for the year x on the base year y and for the year y on the base year z should yield the same result as an index constructed for x on base year z i.e. I0,1 x I1,2 x I2,0 equal is :a)3b)2c)1d)None of theseCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Circular test, an index constructed for the year x on the base year y and for the year y on the base year z should yield the same result as an index constructed for x on base year z i.e. I0,1 x I1,2 x I2,0 equal is :a)3b)2c)1d)None of theseCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Circular test, an index constructed for the year x on the base year y and for the year y on the base year z should yield the same result as an index constructed for x on base year z i.e. I0,1 x I1,2 x I2,0 equal is :a)3b)2c)1d)None of theseCorrect answer is option 'C'. Can you explain this answer?.
Circular test, an index constructed for the year x on the base year y and for the year y on the base year z should yield the same result as an index constructed for x on base year z i.e. I0,1 x I1,2 x I2,0 equal is :a)3b)2c)1d)None of theseCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Circular test, an index constructed for the year x on the base year y and for the year y on the base year z should yield the same result as an index constructed for x on base year z i.e. I0,1 x I1,2 x I2,0 equal is :a)3b)2c)1d)None of theseCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Circular test, an index constructed for the year x on the base year y and for the year y on the base year z should yield the same result as an index constructed for x on base year z i.e. I0,1 x I1,2 x I2,0 equal is :a)3b)2c)1d)None of theseCorrect answer is option 'C'. Can you explain this answer?.
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