Question

Define and discuss index numbers and give their uses, also give the chain base method of constructing a Price Index Numbers.

Answer 1

Index numbers. An index number is an economic data figure reflecting price or quantity compared with a standard or base value. The base usually equals 100 and the index number is usually expressed as 100 times the ratio to the base valueIndex numbers of industrial production are used to measure the changes in the level of industrial production in the country. Index numbers of import prices and export prices are used to measure the changes in the trade of a country.