PRC-2 · Chapter 9 · Question 49 of 60
How is Fisher's Ideal Index mathematically defined in statistical theory?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The geometric mean (square root of the product) of the Laspeyres and Paasche indices.
Explanation
Fisher's Ideal Index perfectly resolves the respective biases of the Laspeyres (upward bias) and Paasche (downward bias) indices by mathematically calculating the strict geometric mean of the two.
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