State the 'factor reversal test'. Show that Fisher's method for constructing index numbers satisfies it. The price index of cosmetics was 10 in 2001 with base as 1995 and 120 in 2002 with 2001 as base. It further increased by 30% in 2003 in relation to the price index of 2002 and decreased by 10% in 2004 as compared to its level in 2003. Find the index for 2004 with 195 as base.

Linear Algebra: A Modern Introduction
4th Edition
ISBN:9781285463247
Author:David Poole
Publisher:David Poole
Chapter2: Systems Of Linear Equations
Section2.4: Applications
Problem 28EQ
icon
Related questions
Question
State the 'factor reversal test’. Show that Fisher’s method for constructing index numbers satisfies it.
The price index of cosmetics was 10 in 2001 with base as 1995 and 120 in 2002 with 2001 as base.
It further increased by 30% in 2003 in relation to the price index of 2002 and decreased by 10% in 2004
as compared to its level in 2003. Find the index for 2004 with 195 as base.
Transcribed Image Text:State the 'factor reversal test’. Show that Fisher’s method for constructing index numbers satisfies it. The price index of cosmetics was 10 in 2001 with base as 1995 and 120 in 2002 with 2001 as base. It further increased by 30% in 2003 in relation to the price index of 2002 and decreased by 10% in 2004 as compared to its level in 2003. Find the index for 2004 with 195 as base.
Expert Solution
steps

Step by step

Solved in 3 steps with 3 images

Blurred answer
Recommended textbooks for you
Linear Algebra: A Modern Introduction
Linear Algebra: A Modern Introduction
Algebra
ISBN:
9781285463247
Author:
David Poole
Publisher:
Cengage Learning
Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage
Algebra: Structure And Method, Book 1
Algebra: Structure And Method, Book 1
Algebra
ISBN:
9780395977224
Author:
Richard G. Brown, Mary P. Dolciani, Robert H. Sorgenfrey, William L. Cole
Publisher:
McDougal Littell
College Algebra (MindTap Course List)
College Algebra (MindTap Course List)
Algebra
ISBN:
9781305652231
Author:
R. David Gustafson, Jeff Hughes
Publisher:
Cengage Learning