Fisher's ideal index satisfies the factor reversal test because: MCQ with Answer and Explanation

Fisher's ideal index satisfies the factor reversal test because:
A. It ignores quantity changes
B. It uses base period weights
C. Its price and quantity index product equals the value index
D. It is the arithmetic mean of Laspeyres and Paasche
Answer: Option C
Solution (By JKSSB Mock Tests)
Fisher's index is designed so that (Fisher price index) × (Fisher quantity index) = Σp₁q₁/Σp₀q₀ (value index), fulfilling the factor reversal test for consistency between price and quantity measures.

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Practice More Statistics Questions

Question #1
Age-specific fertility rate for age group 25-29 is 120 per 1000 women. If there are 15,000 women in this age group, the expected number of births to them is:
A. 1800
B. 1200
C. 2000
D. 1500

Correct Answer: Option A


Explanation:
Births = ASFR × (number of women) / 1000 = 120 × 15000 / 1000 = 1800.

This question belongs to: Accountancy and Statistics Statistics
Question #2
Which measure of central tendency can be used for both quantitative and qualitative (nominal) data?
A. Geometric mean
B. Median
C. Mode
D. Arithmetic mean

Correct Answer: Option C


Explanation:
The mode identifies the most frequent category and can be applied to nominal qualitative data (e.g., favorite color), whereas mean and median require at least ordinal or numerical data.

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Question #3
The harmonic mean is most appropriate for:
A. Average price
B. Average growth rate
C. Average speed when distance is fixed
D. Average height

Correct Answer: Option C


Explanation:
HM is used for rates when the numerator is constant.

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