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प्रश्न
Explain factor reversal test
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उत्तर
This is another test for testing the consistency of a good index number.
The product of price index number and quantity index number from the base year to the current year should be equal to the true value ratio.
That is, the ratio between the total value of current period and total value of the base period is known as true value ratio.
Factor Reversal Test is given by
`"P"_01 xx "Q"_01 = (sum"p"_1"q"_1)/(sum"p"_0"q"_0)`
Where, `"P"_01 = sqrt((sum"p"_1"q"_0 xx sum"p"_1"q"_1)/(sum"p"_0"q"_0 xx sum"p"_0"q"_1))`
Now interchanging P by Q, we get
`"Q"_01 = sqrt((sum"p"_1"p"_0 xx sum"q"_1"p"_1)/(sum"q"_0"p"_0 xx sum"p"_0"p"_1))`
Where P01 is the relative change in price
Q01 is the relative change in quantity.
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संबंधित प्रश्न
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- Index numbers measure relative changes in an economic variable.
- Index numbers are specialized averages.
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Index numbers can be constructed without the base year.
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| Groups | Food | Fuel and Lighting |
Clothing | Rent | Miscellaneous |
| Index Number | 2450 | 1240 | 3250 | 3750 | 4190 |
| Weight | 48 | 20 | 12 | 15 | 10 |
Calculate the cost of living index by aggregate expenditure method:
| Commodity | Weight 2010 |
Price (Rs.) | |
| 2010 | 2015 | ||
| P | 80 | 22 | 25 |
| Q | 30 | 30 | 45 |
| R | 25 | 42 | 50 |
| S | 40 | 25 | 35 |
| T | 50 | 36 | 52 |
Choose the correct alternative:
Laspeyre’s index = 110, Paasche’s index = 108, then Fisher’s Ideal index is equal to:
Using the following data, construct Fisher’s Ideal Index Number and Show that it satisfies Factor Reversal Test and Time Reversal Test?
| Commodities | Price | Quantity | ||
| Base Year | Current Year | Base Year | Current Year | |
| Wheat | 6 | 10 | 50 | 56 |
| Ghee | 2 | 2 | 100 | 120 |
| Firewood | 4 | 6 | 60 | 60 |
| Sugar | 10 | 12 | 30 | 24 |
| Cloth | 8 | 12 | 40 | 36 |
The base year's index of a selected variable is assumed as ______.
