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प्रश्न
Explain factor reversal test
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
Complete the Correlation:
__________ : Single variable :: Composite index : Group of variables
State with reason whether you agree or disagree with the following statement:
Index numbers measure changes in the price level only.
Explain the features of index numbers.
Identify & explain the concept from the given illustration.
Bombay Stock Exchange has developed “Sensex” as a stock market index for reflecting the share prices of listed companies.
Define Laspeyre’s price index number
State the test of adequacy of index number
Define true value ratio
Using the following data, construct Fisher’s Ideal index and show how it satisfies Factor Reversal Test and Time Reversal Test?
| Commodity | Price in Rupees per unit | Number of units | ||
| Basic year | Current year | Base year | Current year | |
| A | 6 | 10 | 50 | 56 |
| B | 2 | 2 | 100 | 120 |
| C | 4 | 6 | 60 | 60 |
| D | 10 | 12 | 50 | 24 |
| E | 8 | 12 | 40 | 36 |
Using Fisher’s Ideal Formula, compute price index number for 1999 with 1996 as base year, given the following:
| Year | Commodity: A | Commodity: B | Commodity: C | |||
| Price (Rs.) | Quantity (kg) | Price (Rs.) | Quantity (kg) | Price (Rs.) | Quantity (kg) | |
| 1996 | 5 | 10 | 8 | 6 | 6 | 3 |
| 1999 | 4 | 12 | 7 | 7 | 5 | 4 |
Choose the correct alternative:
While computing a weighted index, the current period quantities are used in the:
