The factor reversal test requires that: MCQ with Answer and Explanation

The factor reversal test requires that:
A. P₀₁ × P₁₀ = 1
B. Price index × Quantity index = Value index
C. Index numbers are unitless
D. P₀₁ × P₁₂ = P₀₂
Answer: Option B
Solution (By JKExamLibrary)
Factor reversal test checks if the product of a price index and its corresponding quantity index equals the value index (Σp₁q₁/Σp₀q₀), ensuring consistency between price and quantity measurements.

This question belongs to: Accountancy and Statistics Statistics

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