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Each of the following statements is either True or False with your choice of the answer by writing F for False.
- a)Base year quantities are taken as weights in Laspeyre’s price Index number.
- b)Fisher’s ideal index is equal to the Arithmetic mean of Laspeyre’s and Paasche’s index numbers.
- c)Laspeyre’s index number formula does not satisfy time reversal test.
- d)None of these.
Correct answer is option 'B'. Can you explain this answer?
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Each of the following statements is either True or False with your cho...
Explanation:
Fisher's Ideal Index
Fisher's Ideal Index is a weighted geometric mean of Laspeyres and Paasche's Index Numbers. It is considered as the best index number formula because it overcomes the limitations of both Laspeyres and Paasche's Index Numbers.
Laspeyres Price Index Number
Laspeyres Price Index Number is a fixed base index number. It is used to measure the change in the price level of a given set of goods and services over a period of time.
Time Reversal Test
The time reversal test is used to check the consistency of an index number formula. If the formula satisfies the time reversal test, it means that if the time period is reversed, the index number will also be reversed.
Explanation of Answer
Option B is correct because Fisher's Ideal Index is the weighted geometric mean of Laspeyres and Paasche's Index Numbers, and not the arithmetic mean. Option A is incorrect because Laspeyres Price Index Number takes current year quantities as weights, not base year quantities. Option C is incorrect because Laspeyres index number formula satisfies the time reversal test. Option D is incorrect because option B is the correct answer.
Therefore, the correct answer is option B.
Fisher's Ideal Index
Fisher's Ideal Index is a weighted geometric mean of Laspeyres and Paasche's Index Numbers. It is considered as the best index number formula because it overcomes the limitations of both Laspeyres and Paasche's Index Numbers.
Laspeyres Price Index Number
Laspeyres Price Index Number is a fixed base index number. It is used to measure the change in the price level of a given set of goods and services over a period of time.
Time Reversal Test
The time reversal test is used to check the consistency of an index number formula. If the formula satisfies the time reversal test, it means that if the time period is reversed, the index number will also be reversed.
Explanation of Answer
Option B is correct because Fisher's Ideal Index is the weighted geometric mean of Laspeyres and Paasche's Index Numbers, and not the arithmetic mean. Option A is incorrect because Laspeyres Price Index Number takes current year quantities as weights, not base year quantities. Option C is incorrect because Laspeyres index number formula satisfies the time reversal test. Option D is incorrect because option B is the correct answer.
Therefore, the correct answer is option B.
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Each of the following statements is either True or False with your choice of the answer by writing F for False.a)Base year quantities are taken as weights in Laspeyres price Index number.b)Fishers ideal index is equal to the Arithmetic mean of Laspeyres and Paasches index numbers.c)Laspeyres index number formula does not satisfy time reversal test.d)None of these.Correct answer is option 'B'. Can you explain this answer?
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Each of the following statements is either True or False with your choice of the answer by writing F for False.a)Base year quantities are taken as weights in Laspeyres price Index number.b)Fishers ideal index is equal to the Arithmetic mean of Laspeyres and Paasches index numbers.c)Laspeyres index number formula does not satisfy time reversal test.d)None of these.Correct answer is option 'B'. 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 Each of the following statements is either True or False with your choice of the answer by writing F for False.a)Base year quantities are taken as weights in Laspeyres price Index number.b)Fishers ideal index is equal to the Arithmetic mean of Laspeyres and Paasches index numbers.c)Laspeyres index number formula does not satisfy time reversal test.d)None of these.Correct answer is option 'B'. 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 Each of the following statements is either True or False with your choice of the answer by writing F for False.a)Base year quantities are taken as weights in Laspeyres price Index number.b)Fishers ideal index is equal to the Arithmetic mean of Laspeyres and Paasches index numbers.c)Laspeyres index number formula does not satisfy time reversal test.d)None of these.Correct answer is option 'B'. Can you explain this answer?.
Each of the following statements is either True or False with your choice of the answer by writing F for False.a)Base year quantities are taken as weights in Laspeyres price Index number.b)Fishers ideal index is equal to the Arithmetic mean of Laspeyres and Paasches index numbers.c)Laspeyres index number formula does not satisfy time reversal test.d)None of these.Correct answer is option 'B'. 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 Each of the following statements is either True or False with your choice of the answer by writing F for False.a)Base year quantities are taken as weights in Laspeyres price Index number.b)Fishers ideal index is equal to the Arithmetic mean of Laspeyres and Paasches index numbers.c)Laspeyres index number formula does not satisfy time reversal test.d)None of these.Correct answer is option 'B'. 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 Each of the following statements is either True or False with your choice of the answer by writing F for False.a)Base year quantities are taken as weights in Laspeyres price Index number.b)Fishers ideal index is equal to the Arithmetic mean of Laspeyres and Paasches index numbers.c)Laspeyres index number formula does not satisfy time reversal test.d)None of these.Correct answer is option 'B'. Can you explain this answer?.
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