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Index Numbers — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsIndex Numbers1 Mark
Question
Which method is considered 'ideal' for constructing index number and why?
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Answer

Fisher's method is considered ideal for constructing index number because:
  1. It satisfies factor reversal test.
  2. It satisfies time reversal test.
  3. It is based on different weights.

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