CA Foundation Exam > CA Foundation Questions > Fishers price index number is the -------a)G....
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Fishers price index number is the -------
- a)G.M. of Lasperys and Paasches I.N.
- b)A.M. of Lasperys and Paasches I.N.
- c)Difference between Lasperys and Paasches I.N
- d)None of the above.
Correct answer is option 'A'. Can you explain this answer?
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Fishers price index number is the -------a)G.M. of Lasperys and Paasch...
Laspeyres and Paasche Price Indexes or Inflation Factors will differ. Their geometric averages are called Fisher Indexes (after Irving Fisher). As a measure of the inflation factor (one plus the inflation rate), a Fisher Price Index is the square root of the product of Laspeyres and Paasche Price Indexes.
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Fishers price index number is the -------a)G.M. of Lasperys and Paasch...
Fisher's Price Index Number
The Fisher's Price Index Number is a method used to calculate an average index number by taking the geometric mean of the Laspeyres and Paasche index numbers. It is used to measure the average price change of a basket of goods and services over a specific period of time.
Laspeyres Index Number
The Laspeyres index number is a price index that measures the average price change of a fixed basket of goods and services relative to their prices in a base period. It uses the quantities of the base period to calculate the index number. The formula for the Laspeyres index number is:
Laspeyres Index Number = (Σ(P1Q0) / Σ(P0Q0)) * 100
Where P1 is the price in the current period, Q0 is the quantity in the base period, and P0 is the price in the base period. The Laspeyres index number tends to overstate price increases because it does not take into account changes in quantities.
Paasche Index Number
The Paasche index number is a price index that measures the average price change of a variable basket of goods and services relative to their prices in a current period. It uses the quantities of the current period to calculate the index number. The formula for the Paasche index number is:
Paasche Index Number = (Σ(P1Q1) / Σ(P0Q1)) * 100
Where P1 is the price in the current period, Q1 is the quantity in the current period, and P0 is the price in the base period. The Paasche index number tends to understate price increases because it does not take into account changes in quantities.
Fisher's Index Number
The Fisher's index number is calculated by taking the geometric mean of the Laspeyres and Paasche index numbers. The formula for the Fisher's index number is:
Fisher's Index Number = √(Laspeyres Index Number * Paasche Index Number)
Taking the geometric mean of the Laspeyres and Paasche index numbers allows for a more accurate representation of the average price change, as it takes into account both the fixed and variable baskets of goods and services.
Therefore, the correct answer is option 'A' - the Fisher's Price Index Number is the geometric mean of the Laspeyres and Paasche index numbers.
The Fisher's Price Index Number is a method used to calculate an average index number by taking the geometric mean of the Laspeyres and Paasche index numbers. It is used to measure the average price change of a basket of goods and services over a specific period of time.
Laspeyres Index Number
The Laspeyres index number is a price index that measures the average price change of a fixed basket of goods and services relative to their prices in a base period. It uses the quantities of the base period to calculate the index number. The formula for the Laspeyres index number is:
Laspeyres Index Number = (Σ(P1Q0) / Σ(P0Q0)) * 100
Where P1 is the price in the current period, Q0 is the quantity in the base period, and P0 is the price in the base period. The Laspeyres index number tends to overstate price increases because it does not take into account changes in quantities.
Paasche Index Number
The Paasche index number is a price index that measures the average price change of a variable basket of goods and services relative to their prices in a current period. It uses the quantities of the current period to calculate the index number. The formula for the Paasche index number is:
Paasche Index Number = (Σ(P1Q1) / Σ(P0Q1)) * 100
Where P1 is the price in the current period, Q1 is the quantity in the current period, and P0 is the price in the base period. The Paasche index number tends to understate price increases because it does not take into account changes in quantities.
Fisher's Index Number
The Fisher's index number is calculated by taking the geometric mean of the Laspeyres and Paasche index numbers. The formula for the Fisher's index number is:
Fisher's Index Number = √(Laspeyres Index Number * Paasche Index Number)
Taking the geometric mean of the Laspeyres and Paasche index numbers allows for a more accurate representation of the average price change, as it takes into account both the fixed and variable baskets of goods and services.
Therefore, the correct answer is option 'A' - the Fisher's Price Index Number is the geometric mean of the Laspeyres and Paasche index numbers.
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Fishers price index number is the -------a)G.M. of Lasperys and Paasches I.N.b)A.M. of Lasperys and Paasches I.N.c)Difference between Lasperys and Paasches I.Nd)None of the above.Correct answer is option 'A'. Can you explain this answer?
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Fishers price index number is the -------a)G.M. of Lasperys and Paasches I.N.b)A.M. of Lasperys and Paasches I.N.c)Difference between Lasperys and Paasches I.Nd)None of the above.Correct answer is option 'A'. 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 Fishers price index number is the -------a)G.M. of Lasperys and Paasches I.N.b)A.M. of Lasperys and Paasches I.N.c)Difference between Lasperys and Paasches I.Nd)None of the above.Correct answer is option 'A'. 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 Fishers price index number is the -------a)G.M. of Lasperys and Paasches I.N.b)A.M. of Lasperys and Paasches I.N.c)Difference between Lasperys and Paasches I.Nd)None of the above.Correct answer is option 'A'. Can you explain this answer?.
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