Ayushi posted an Question
August 10, 2020 • 23:27 pm 30 points
  • UGC NET
  • Economics

91. with reference to price index number, if p xp =1, which test it satisfies ? (1) time reversal test (2) factor reversal test (3) t-test (4) circular test

91. With reference to Price Index Number, if P xP =1, which test it satisfies ? (1) Time Reversal Test (2) Factor Reversal Test (3) t-Test (4) Circular Test

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    Nidhi taparia Best Answer

    The correct answer is (1) Time reversal test. Here we are testing whether the price index becomes inverse of itself when current period (denoted by 1) is changed to base period (denoted by 0) and vice versa. Hence P01 denotes change in price level in current period with respect to base period, and P10 denotes change in price level in base period with respect to current period.

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