Which of the following test is not satisfied by the Fisher's Ideal Index Number ?
Fisher’s ideal index satisfies time and factor reversal under consistent definitions but does not satisfy the circular test in general, (3). It can satisfy circularity in…
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Which of the following test is not satisfied by the Fisher's Ideal Index Number ?
Answer and explanation
Correct answer C
Fisher’s ideal index satisfies time and factor reversal under consistent definitions but does not satisfy the circular test in general, (3). It can satisfy circularity in special datasets; failure here means it is not guaranteed for all admissible price and quantity data.
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