The is satisfied when P_{a b} × P_{b c} × P_{c a} = 1

Correct Answer is : Circular Test

The is satisfied when P_{a b} × P_{b c} × P_{c a} = 1

Correct Answer is : Circular Test

Test Index

Index Numbers and Time series

Question : 81 of 81

Marks: +1, -0

P_{a b} \times P_{b c} \times P_{c a} = 1

Time reversal test
Factor reversal test
Circular Test
none of these

Validate

Solution:

Concept:

The circular test in index numbers checks if the product of chain indices over a cycle equals 1.

Explanation:

The condition

P_{ab} \times P_{bc} \times P_{ca} = 1

means that when you go from period a to b, then b to c, and finally c back to a, the overall index should return to the starting value (1).

This property is known as the circular test.

It is an extension of the time reversal test and factor reversal test, but specifically requires consistency in a closed loop of three or more periods.

Answer:

Circular Test

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