Question

State The Principal types of "Index Number"...​

Answer 1

Answer:

There are three types of index numbers which are generally used. They are price index, quantity index and value index. These index numbers can be developed either by aggregate method or by average of relative method.

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Answer 2

Answer:

Types Of Index Numbers.

In statistics, index numbers are the statistical measures of changes in a group of individual data observations. These numbers determine the degree of changes over the period of time. Index numbers are represented as percentages of a single base number. It plays a vital role in statistical economics. It is used to determine the changes in the factors which cannot be directly measured.

Types:

Index numbers are categorized on the basis of the variables that are used to measure. The most commonly used index numbers are:

1. Simple index number: A simple index number measures the relative change of a single variable with respect to a single base number. It is determined from the single data item.

2. Composite index number: It measures the average relative changes of a group of variables related with respect to a single base number. It is determined from a group of different items.

3. Price Index Numbers: It measures the relative changes of prices of the products or commodities between any two time periods. It helps to interpret the variation of economic and business conditions over a period of time.

4. Quantity Index Numbers: It measures the relative changes of physical quantities of goods or commodities that are produced, used or sold. The goods or commodities can be single item or group of items.

Index numbers are computed using two methods, namely Price Relative method and Aggregate method. These are used to study the relative changes of income, business, and economics over a period of time. Hence, it is essential to determine the direction of production and makes decisions to enhance the business conditions.