Which among the following statements is INCORRECT ?
It is not possible to shift the base if it is the case of fixed base index
Index number is a relative measure showing the change in a variable such as price or quantity over time or place with respect to a base. In fact, every index number is effectively weighted, either explicitly or implicitly, since items differ in importance. Theoretically, the geometric mean is considered the best average for constructing index numbers because it satisfies the time reversal and circular tests and gives equal importance to equal ratios of change.
The statement that shifting the base is not possible in a fixed base index is wrong. Base shifting is done by dividing every index of the series by the index of the new base year and multiplying by 100, and it is routinely used to compare series or bring them to a more recent base.
Hence, the answer is It is not possible to shift the base if it is the case of fixed base index.
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