Index NumbersMCQPYQ June 19Question 3784 of 197
All Questions

Which is called an ideal index numbers

Options

ALaspeyre's index number
BPaasche's index number
CFisher's index number
DMarshall Edgeworth index number
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Correct Answer

✅ Option c — Fisher's index number

All Options:

  • ALaspeyre's index number
  • BPaasche's index number
  • CFisher's index number
  • DMarshall Edgeworth index number

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Detailed Solution & Explanation

**Fisher's Index Number** is considered the **Ideal Index Number** because: 1. It is the geometric mean of Laspeyres and Paasche index numbers: P01F=P01L×P01PP_{01}^F = \sqrt{P_{01}^L \times P_{01}^P} 2. It uses both base year quantities (q0\displaystyle q_0) and current year quantities (q1\displaystyle q_1) as weights. 3. It satisfies the Unit Test, Time Reversal Test, and Factor Reversal Test. Hence, **Option C** is the correct answer.

About This Chapter: Index Numbers

Paper

Paper 3: Quantitative Aptitude

Weightage

4-6 Marks

Key Topics

Construction of Index Numbers, Time Series

This chapter covers Construction of Index Numbers, Time Series and is part of Paper 3: Quantitative Aptitude in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 4-6 Marks weightage. Focus on understanding core concepts rather than memorizing.

Key Concepts to Understand

Index Number

A statistical device for measuring changes in the magnitude of a group of related variables (like prices or production) over time.

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More Questions from Index Numbers

In price index, when a new commodity is required to be added, which of the following index is used?

Fisher's ideal formula for calculating index number satisfies the ________

Shifted Price Index = Original Price IndexPrice Index of the year on which it has to be shifted×100\displaystyle \frac{\text{Original Price Index}}{\text{Price Index of the year on which it has to be shifted}} \times 100

If Laspeyres's Index Number is 250 and Paasche's Index Number is 160, then Fisher's Index number is

If ∑P0q0=240\displaystyle \sum P_0q_0 = 240, ∑P1q0=480\displaystyle \sum P_1q_0 = 480, ∑P0q1=600\displaystyle \sum P_0q_1 = 600 and ∑P1q1=192\displaystyle \sum P_1q_1 = 192, then Laspeyres's Index Number is

If ΣPnqn=249\displaystyle \Sigma P_n q_n = 249, ΣP0q0=150\displaystyle \Sigma P_0 q_0 = 150, ΣPnq0=145\displaystyle \Sigma P_n q_0 = 145 and Paasche's Index Number = 150, then Fisher's Ideal Price Index Number is

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