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Statistics question from FAA exam, 2024 by JKSSB

An economist estimated that a commodity Y had a price index of 10, calculated for 1993 with a base year of 1990, and a quantity index of 0.5 when calculated for 1990 with a base year of 1993. What is the Fisher Ideal Value Index for 1993 with the base year taken to be 1990?

Last updated Aug 28, 2026
Correct Answer: Option C — 20
Step-by-Step Breakdown
Fisher's Ideal Index satisfies two important principles in index number theory: the Time Reversal Test and the Factor Reversal Test.

Let 1990 be base year 0 and 1993 be current year 1.

1. Applying the Time Reversal Test
The Time Reversal Test states that the quantity index for 1993 with base year 1990 is equal to 1 divided by the quantity index for 1990 with base year 1993.

Given that the quantity index for 1990 with base year 1993 is 0.5:

Quantity index for 1993 with base year 1990 = 1 divided by 0.5 = 2

2. Applying the Factor Reversal Test
The Factor Reversal Test states that the Fisher Ideal Value Index equals the Price Index multiplied by the Quantity Index for the same time period.

Price index = 10

Quantity index = 2

Fisher Ideal Value Index = 10 multiplied by 2 = 20
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
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JKSSB FAA 2024

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Exam JKSSB
Recruitment FAA
Year 2024
Subject Statistics
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