Most commonly used index number is
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Price Index Number is a normalized average (typically a weighted average) of price relatives for a given class of goods or services in a given region, during a given interval of time. It is the most commonly used index number.
Answered by
1
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Most commonly used index number is price index number.
Explanation:
- Index numbers measure the net change among the related variables over a period of time or at two or more places.
- An index number is a device for measuring changes in a variable ora group of related variables.
- For example, change in prices, production, and more, over the two periods or at two places.
- Simple averages like, mean, median, mode, and more can be used to compare the variables having similar units.
- price index, measure of relative price changes, consisting of a series of numbers arranged so that a comparison between the values for any two periods or places will show the average change in prices between periods or the average difference in prices between places.
- To calculate the Price Index, take the price of the Market Basket of the year of interest and divide by the price of the Market Basket of the base year, then multiply by 100.
- Price indices are represented as index numbers, number values that indicate relative change but not absolute values (i.e. one price index value can be compared to another or a base, but the number alone has no meaning). Price indices generally select a base year and make that index value equal to 100.
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