Question

Pescribe the uses of Index Numbers. What considerations are taken into
account while selecting base year for the preparation of an index number?​

Answer 1

Answer:

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. Consequently, many different index numbers have been developed for special use

Explanation:

ADVERTISEMENTS: Professor Chandler defines it thus: “An index number of prices is a figure showing the height of average prices at one time relative to their height at some other time that is taken at the base period.” To understand the meaning of the term index number, three points are to be noted.