Fewpal
0 votes
308 views
in Statistics by (59.5k points)

Define/what are the conditions for an Index number to satisfy TRT and FRT.

1 Answer

+1 vote
by (64.3k points)
selected by
 
Best answer

Time Reversal Test requires that the product of P01 (price index number computed time backward) and P10 (price index number computed time forward) should be equal to one [1]; ie P01 × p10 = 1.

Factor Reversal Test requires that the product of P01 (price index number) and Q01 (quantity index number) should be equal to the net changes occurring in between the current year and the base year (V01)

ie. P01 × Q01   (Except the factor 100)

Related questions

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.

Categories

...