The correct answer is: A. GM of Laspeyres and Paasche index numbers.
The Fisher index number is a geometric mean of the Laspeyres and Paasche index numbers. It is a weighted average of the two index numbers, where the weights are the shares of the two groups in the total expenditure.
The Laspeyres index number is a price index that measures the average change in prices of a basket of goods and services over time, from the base period to the current period, from the point of view of a consumer who purchases the same basket of goods and services in both periods.
The Paasche index number is a price index that measures the average change in prices of a basket of goods and services over time, from the base period to the current period, from the point of view of a consumer who purchases a different basket of goods and services in the current period than in the base period.
The Fisher index number is considered to be a more accurate measure of inflation than either the Laspeyres or Paasche index numbers, because it takes into account the fact that consumers tend to change their spending patterns in response to changes in prices.
The following is a brief explanation of each option:
- Option A: The Fisher index number is a geometric mean of the Laspeyres and Paasche index numbers. It is a weighted average of the two index numbers, where the weights are the shares of the two groups in the total expenditure.
- Option B: The AM of Laspeyres and Paasche index numbers is the arithmetic mean of the Laspeyres and Paasche index numbers. It is a simple average of the two index numbers.
- Option C: The HM of Laspeyres and Paasche index numbers is the harmonic mean of the Laspeyres and Paasche index numbers. It is a weighted average of the two index numbers, where the weights are the reciprocals of the shares of the two groups in the total expenditure.
- Option D: The GM of Laspeyres and Marshall-Edge worth index numbers is the geometric mean of the Laspeyres and Marshall-Edge worth index numbers. It is a weighted average of the two index numbers, where the weights are the shares of the two groups in the total expenditure.