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The quantity Index number using Fisher formula satisfies:
- a)Unit Test
- b)Factor Reversal Test
- c)Circular Test
- d)Time Reversal Test
Correct answer is option 'D'. Can you explain this answer?
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Most Upvoted Answer
The quantity Index number using Fisher formula satisfies:a)Unit Testb)...
Explanation:
The Fisher’s Ideal Index formula is given by:
I = √(P1Q1 + P2Q2 + … + PnQn)/(P0Q0)
Where,
I = Index number
Pi = Price of commodity i in the current year
Qi = Quantity of commodity i in the base year
P0 = Price of commodity i in the base year
Q0 = Quantity of commodity i in the base year
The Fisher’s Ideal Index formula satisfies the Time Reversal Test.
Time Reversal Test:
This test examines the reliability of the index number when the base year and the current year are interchanged. In other words, if the index number is calculated using the current year as the base year and the base year as the current year, will it give the same result? The Fisher’s Ideal Index formula satisfies the Time Reversal Test. This means that if the base year and current year are interchanged, the index number will remain the same. This property makes the Fisher’s Ideal Index formula more reliable and accurate compared to other index number formulas.
The Fisher’s Ideal Index formula is given by:
Where,
I = Index number
Pi = Price of commodity i in the current year
Qi = Quantity of commodity i in the base year
P0 = Price of commodity i in the base year
Q0 = Quantity of commodity i in the base year
The Fisher’s Ideal Index formula satisfies the Time Reversal Test.
Time Reversal Test:
This test examines the reliability of the index number when the base year and the current year are interchanged. In other words, if the index number is calculated using the current year as the base year and the base year as the current year, will it give the same result? The Fisher’s Ideal Index formula satisfies the Time Reversal Test. This means that if the base year and current year are interchanged, the index number will remain the same. This property makes the Fisher’s Ideal Index formula more reliable and accurate compared to other index number formulas.
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The quantity Index number using Fisher formula satisfies:a)Unit Testb)Factor Reversal Testc)Circular Testd)Time Reversal TestCorrect answer is option 'D'. Can you explain this answer?
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The quantity Index number using Fisher formula satisfies:a)Unit Testb)Factor Reversal Testc)Circular Testd)Time Reversal TestCorrect answer is option 'D'. 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 The quantity Index number using Fisher formula satisfies:a)Unit Testb)Factor Reversal Testc)Circular Testd)Time Reversal TestCorrect answer is option 'D'. 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 The quantity Index number using Fisher formula satisfies:a)Unit Testb)Factor Reversal Testc)Circular Testd)Time Reversal TestCorrect answer is option 'D'. Can you explain this answer?.
The quantity Index number using Fisher formula satisfies:a)Unit Testb)Factor Reversal Testc)Circular Testd)Time Reversal TestCorrect answer is option 'D'. 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 The quantity Index number using Fisher formula satisfies:a)Unit Testb)Factor Reversal Testc)Circular Testd)Time Reversal TestCorrect answer is option 'D'. 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 The quantity Index number using Fisher formula satisfies:a)Unit Testb)Factor Reversal Testc)Circular Testd)Time Reversal TestCorrect answer is option 'D'. Can you explain this answer?.
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