Question

describe any four uses of index number

Answer 1

The primary purposes of an index number are to provide a value useful for comparing magnitudes of aggregates of related variables to each other, and to measure the changes in these magnitudes over time.

Answer 2

Index numbers are used to measure changes in the value of money. A study of the rise or fall in the value of money is essential for determining thedirection of production and employment to facilitate future payments and to know changes in thereal income of different groups of people at different places and times.