Question

what are index numbers? write advantages of index number?​

Answer 1

Answer:

index number:number giving the magnitude of a physical property or other measured phenomenon in terms of a standard.

advantages of index number:

Changes in Cost of Living: ...

Changes in Production: ...

Importance in Trade: ...

Formation of Economic Policy: ...

Useful in All Fields:

Answer 2

Answer:

Index number helps to know the inflation rate by measuring price level and value of money between two periods. It helps Central Bank in deciding credit policy. Helps in adjustment in salaries and allowances: Index number helps to determine wages and allowance of employees.

Various advantages of index numbers are given below:

General Importance.

Measurement of Value of Money.

Changes in Cost of Living.

Changes in Production.

Importance in Trade.

Formation of Economic Policy.

Useful in All Fields.