The Fisher index
A) uses the arithmetic mean of the Paasche index and the Laspeyres index.
B) uses the standard deviation of the Paasche index and the Laspeyres index.
C) uses the geometric mean of the Paasche index and the Laspeyres index.
D) uses the harmonic mean of the Paasche index and the Laspeyres index.

Question

Quizplus · Accepted Answer

The Fisher index uses the geometric mean of the Paasche and Laspeyres indices. This is because the geometric mean is more appropriate for measuring the average change in prices, particularly for goods with different levels of price variability.

The Fisher Index