Question

Factors which affects index number

Answer 1

Answer:

I hope this helps you

Explanation:

Underlying Factors affecting the Stock Market

Economic growth. ...

Interest rates. ...

Stability. ...

Confidence and expectations. ...

Bandwagon effect. ...

Related markets. ...

Price to earnings ratios.

Answer 2

An Index Number is a statistical origin for measuring changes in the value of money. It is a number which exemplifies the average price of a group of commodities at a specific time in consideration to the average price of the same group of commodities at another period.

Factors Which Affect Index Number

• Choice of Weights:- It is essential to determine how much importance or relative weight should be given to the commodities selected.

• Choice of Base Year:- Movements in prices will seem to be more or less crucial, according to the base year selected for the prices of commodities selected.

• Income Variation:- Cost of living index numbers undergo another flaw. Incomes differ broadly and various income groups have various consumption habits.

• The Time Factor: Consump­tion habits and standards of a living shift in course of time. Techniques of production and the classification of goods produced do not persist the same.

#SPJ2