Question

If Laspeyre's index number is 225 and Paasche's index number is 144, then Fisher's ideal index number is:

• A. 160
• B. 120
• C. 180
• D. 210

Answer 1

The Correct Option is C

To find Fisher's ideal index number, we use the formula for Fisher's index, which is the geometric mean of Laspeyre's index number and Paasche's index number. The formula is:

Fisher's Ideal Index = √(Laspeyres' Index × Paasche's Index)

Given that Laspeyre's index number (L) is 225 and Paasche's index number (P) is 144, substitute these values into the formula:

Fisher's Ideal Index = √(225 × 144)

Calculate the product under the square root:

225 × 144 = 32400

Now, find the square root of the product:

√32400 = 180

Therefore, Fisher's ideal index number is 180. The correct answer is 180.