Bissoy.com
Doctors Medicines MCQs Q&A

The formula for calculating an index number should be such that it gives the same ratio between one point of comparison and the other, no matter which of the two is taken as the base, or putting it another way, the index number reckoned forward should be reciprocal of the one reckoned backward'- which test of consistency of index number is this?

The formula for calculating an index number should be such that it gives the same ratio between one point of comparison and the other, no matter which of the two is taken as the base, or putting it another way, the index number reckoned forward should be reciprocal of the one reckoned backward'- which test of consistency of index number is this? Correct Answer Time Reversal Test

Explanation

The time reversal test is a test to determine whether a given method will work both ways in time, forward and backward. In other words of professor I. Fisher ''The test is that for formula for calculating the index number should be such that it will give the same ratio between one point of comparison and the other, no matter which of the two is taken as base.

∴ This tese is Time reversal test

Key Points

Unit test =  This test requires that an index number formula should be such that it does not affect the value of the index number, even if, the units of the price or quantities quoted are altered. This test is satisfied by all the index formulas. 

Circular test = Another test of the adequacy of the index number formula is what is known as the 'circular test'. If in the use of index numbers interest attaches not merely to a comparison of two years, but to the measurement of price changes over a period of years. It is frequently desirable to shift the base.

Factor Reversal Test = The factor reversal test requires that multiplying a price index and a volume index of the same type should be equal to the proportionate change in the current values (e.g. the “Fisher Ideal” price and volume indexes satisfy this test, unlike either the Paasche or Laspeyres indexes)

Related Questions

How far is point 'R' from Point 'T'? Statement (I): Point 'R' is 5 metres to the north of point 'M'. Point 'U' is 4 metres to the east of point 'R'. Point 'T' is to the west of point 'R' such that points 'U' 'R' and 'T' form a straight line of  metres. Statement (II): Point 'Z' is metres to the south of point 'T'. Point 'U' is  metres to the east of point 'T'. Point 'M' is  metres to the east of point 'Z'. Point 'R' is  metres to the north of point 'M'. Point 'R' lies on the line formed by joining points 'T' and 'U'.
Point A is 3m in the north of point B. Point D is 2m in the east of point E. Point F is 9m in the west of point G. Point C is 4m in the west of point B. Point C is 3m in the south of point D. Point F is 5m in the south of point E. Point H is 5m in the north of point G. What is the shortest distance between point H and point A?
Consider the following statements and identify which of the following are true? While calculating GDP, income generated by foreigners in a country is taken into consideration While calculating GDP, income generated by nationals of a country outside the country is taken into account While calculating GNP, income generated by foreigners in a country is taken into consideration While calculating GNP, income generated by nationals of a country outside the country is taken into account
Point P is 4m in the west of point V. Point R is 6m in the north of point Q. Point T is 5m in the south of point S. Point V is in the middle of point R and Q. Point U is 5m in the east of point R. Point V is in north of point Q. Point S is 5m in the east of point V. What is the area of triangle formed by point P, R and Q?
Garima starts walking towards the south from point R. He walks for 5m to reach Point S then turns right and walks for 2m to reach point T from there he turns left and walks for 3m to reach Point Z. He then turns right from point Z and walks for 6m to reach point Y and then turns right and walks for 3m to reach point X. He then turns right from point X and walks for 4m to reach point W and then turns left and walks for 5m to reach point V and then turns left and walks for 4m till point U and stops. What is the shortest distance between point V and point R?
Study the following information and answer the questions. Point A is 8m to the west of Point B. Point C is 4m to the south of Point B. Point D is 4m to the east of Point C. Point F is 6m to the north of Point D. Point E is 8m to the west of Point F. Point G is 2m to the south of Point E. If point G is 4m to the north of Point H, then what is the distance between H and D?
Study the following information and answer the questions. Point A is 8m to the west of Point B. Point C is 4m to the south of Point B. Point D is 4m to the east of Point C. Point F is 6m to the north of Point D. Point E is 8m to the west of Point F. Point G is 2m to the south of Point E. How far and in which direction is Point G from Point A?
For transistor action (a) Base, emitter, and collector regions should have similar size and doping concentrations. (b) The base region must be very thin and lightly doped. (c) The emitter-base junction is forward biased and the base-collector junction is reverse biased. (d) Both the emitter-base junction as well as the base-collector junction are forward biased. Which one of the following pairs of statements is correct?
Abeer has 14 novels. Abeer’s friend Sanjay takes 3 of them and gives 2 novels to Abeer. Abeer donates 7 novels but buys 4. Joy takes 4 novels from Abeer and gives him 5. Abeer takes one novel from Sanjay and gives it to Joy in exchange for 3 more. Abeer gives those 3 novels to Sanjay and he gives Abeer a novel and a magazine. Rahul takes the magazine which Sanjay gave to Abeer and gives Abeer a textbook. Abeer gives the textbook to Joy in exchange for a novel. Rahul takes the novel from Sanjay, gives it to Joy for a magazine and gives Abeer the magazine for a novel. How many textbooks does Abeer have?
Statement I): t-test and F-test are based on the identical assumptions. Statement II): t-test is used for comparison between two groups whereas F-test is used for comparison between more than two groups. In the context of the above two statements, which one of the following codes is correct?