Question

explain with suitable example that laspeyres and paasehes index number do not satisfy these test and that fiseher ideal index satisfy these test
​

Answer 1

Explanation:

The Paasche index is also called a “current weighted index”. It is a weighted harmonic average of the price relatives that uses the actual expenditure shares in the later period t as weights; whereas the Laspeyres index is the weighted arithmetic average that uses weights from a previous