STA304 GDB NO. 1 FALL 2021 || 100% RIGHT SOLUTION || APPLIED STATISTICS II BY VuTech

 

STA304 GDB NO. 1 FALL 2021

STA304 GDB NO. 1 FALL 2021 || 100% RIGHT SOLUTION || APPLIED STATISTICS II BY VuTech

 

QUESTION NO. 1

Different between time reversal test and factor reversal test.

Answer:

Time Reversal Test

If the time subscripts () and n are interchanged in a price (or quantity) index number formula wherever they appear, then the resulting price (or quantity) formula should be the reciprocal of the original index formula, ignoring the factor 100. Symbolically, the test requires that

P_on = 1 / P_no                              P_on x P_no = 1

 

Factor Reversal Test:

If the factors p’s (prices) and q’s (quantities) occurring in a price (or quantity) index formula be interchanged (or reversed) so that a quantity (or price) index formula is obtained, then the product of the two index numbers should equal the value index number, i.e.

In other words, the factor reversal test requires that

(Price Index)(Quantity Index) = Value Index

SUBSCRIBE, SHARE, LIKE AND COMMENTS FOR MORE UPDATES

KINDLY, DON’T COPY PASTE

QUESTION NO. 2

Write down the steps of construction of an index number.

Answer:

Following steps of construction of an index number.

·        Selection of commodities to be included, their number and price quotations.

·        Selection of the base period and calculation of price relatives.

·        Selection of average to be used.

·        Selection of appropriate weights.

 

SUBSCRIBE, SHARE, LIKE AND COMMENTS FOR MORE UPDATES 

KINDLY, DON’T COPY PASTE