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Tests for an Ideal Index Number
1. Factor Reversal Test
Factor Reversal Test indicates that when the price index is multiplied along with a quantity index that is factors are reversed, it should result in the value index.
2. The time reversal test
If we reverse the time subscripts of a quantity or price index, the result must be reciprocal of the original index.
Examples of logarithms: log 2 8 = 3 since 8 = 2 3 log 10 0.01 = -2 since 0.01 = 10
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