# why is fisher's index number called an ideal index number?

fisher's method is considered as 'ideal' because:-

1. it is based on variable weights

2. it takes into consideration te price and quantities of both the base year and quantities off both the base year and current year.

3. it is based on geometric mean which is regarded as the best mean for calculating index number

4. it satisfies both the TIME REVERSAL TEST and FACTOR REVERSAL TEST.

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hope it helps • -1
Fisher's index no. is an ideal method as it contains the base year quantity and current year quantity both itself.
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fisher's method is considered as 'ideal' because:-

1. it is based on variable weights

2. it takes into consideration te price and quantities of both the base year and quantities off both the base year and current year.

3. it is based on geometric mean which is regarded as the best mean for calculating index number

4. it satisfies both the TIME REVERSAL TEST and FACTOR REVERSAL TEST.
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Why is fisher index called an ideal index
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