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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)Current year price are taken as weights in Paasche’s quantity index number.
- b)Fisher’s Ideal Index formula satisfies factor Reversal Test.
- c)The sum of the quantities of the base period and current period is taken as weights in Laspeyre’s index number.
- d)None of these.
Correct answer is option 'C'. Can you explain this answer?
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Each of the following statements is either True or False with your cho...
Explanation:
a) Current year prices are taken as weights in Paasches quantity index number.
False. In the Paasches quantity index number, the base year prices are taken as weights. The Paasches index measures the change in quantity demanded by consumers when current year prices are compared to base year prices. It calculates the ratio of the current year expenditure to the base year expenditure, with quantities held constant.
b) Fishers Ideal Index formula satisfies factor Reversal Test.
False. The Fisher's Ideal Index formula does not satisfy the factor reversal test. The factor reversal test is a test used to check the consistency of index numbers. If the index satisfies the factor reversal test, then reversing the base and current periods should give the reciprocal of the original index. However, the Fisher's Ideal Index does not satisfy this property.
c) The sum of the quantities of the base period and current period is taken as weights in Laspeyres index number.
True. In the Laspeyres index number, the sum of the quantities of the base period and current period is taken as weights. The Laspeyres index measures the change in expenditure required to maintain the same level of utility when current year prices are compared to base year prices. It calculates the ratio of the current year expenditure to the base year expenditure, with quantities held constant at the base year level.
d) None of these.
False. The correct answer is option 'C' as explained above.
a) Current year prices are taken as weights in Paasches quantity index number.
False. In the Paasches quantity index number, the base year prices are taken as weights. The Paasches index measures the change in quantity demanded by consumers when current year prices are compared to base year prices. It calculates the ratio of the current year expenditure to the base year expenditure, with quantities held constant.
b) Fishers Ideal Index formula satisfies factor Reversal Test.
False. The Fisher's Ideal Index formula does not satisfy the factor reversal test. The factor reversal test is a test used to check the consistency of index numbers. If the index satisfies the factor reversal test, then reversing the base and current periods should give the reciprocal of the original index. However, the Fisher's Ideal Index does not satisfy this property.
c) The sum of the quantities of the base period and current period is taken as weights in Laspeyres index number.
True. In the Laspeyres index number, the sum of the quantities of the base period and current period is taken as weights. The Laspeyres index measures the change in expenditure required to maintain the same level of utility when current year prices are compared to base year prices. It calculates the ratio of the current year expenditure to the base year expenditure, with quantities held constant at the base year level.
d) None of these.
False. The correct answer is option 'C' as explained above.
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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)Current year price are taken as weights in Paasches quantity index number.b)Fishers Ideal Index formula satisfies factor Reversal Test.c)The sum of the quantities of the base period and current period is taken as weights in Laspeyres index number.d)None of these.Correct answer is option 'C'. 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)Current year price are taken as weights in Paasches quantity index number.b)Fishers Ideal Index formula satisfies factor Reversal Test.c)The sum of the quantities of the base period and current period is taken as weights in Laspeyres index number.d)None of these.Correct 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 Each of the following statements is either True or False with your choice of the answer by writing F for False.a)Current year price are taken as weights in Paasches quantity index number.b)Fishers Ideal Index formula satisfies factor Reversal Test.c)The sum of the quantities of the base period and current period is taken as weights in Laspeyres index number.d)None of these.Correct 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 Each of the following statements is either True or False with your choice of the answer by writing F for False.a)Current year price are taken as weights in Paasches quantity index number.b)Fishers Ideal Index formula satisfies factor Reversal Test.c)The sum of the quantities of the base period and current period is taken as weights in Laspeyres index number.d)None of these.Correct answer is option 'C'. Can you explain this answer?.
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