why fishers index numbr is said to be an ideal indx number?
Fisher’s Index Number is an Ideal Method because of the following reasons:
1. It is based on the geometric mean of Laspeyre’s and Paasche’s Index Numbers.
2. It satisfies both the Factor Reversal Test as well as Time Reversal Test.
3. Unlike Laspeyre’s and Paasche’s, Fisher’s Method considers price and quantities of both
the base year as well as of the current year.
4. It overcomes the shortcomings of Laspeyre’s and Paasche’s Method.
1. It is based on the geometric mean of Laspeyre’s and Paasche’s Index Numbers.
2. It satisfies both the Factor Reversal Test as well as Time Reversal Test.
3. Unlike Laspeyre’s and Paasche’s, Fisher’s Method considers price and quantities of both
the base year as well as of the current year.
4. It overcomes the shortcomings of Laspeyre’s and Paasche’s Method.