Laspeyre's method and Paasche's method do not satisfy
A)unit test
B)time reversal test
C)factor reversal test
D)none of the above

Question

Quizplus · Accepted Answer

Laspeyre's and Paasche's methods do not satisfy the time reversal test, which requires that if the price index is calculated from time 0 to time 1, the inverse calculation from time 1 to time 0 should yield the reciprocal of the original index.

Laspeyre's Method and Paasche's Method Do Not Satisfy