Economy, asked by oshu09, 4 months ago

What are the limitations of index numbers? Explain.

Answers

Answered by Anonymous

The decision of Objective, Selection of Base Period, Selection of commodities, Selection of sources of data, Selection of 'Weights', Selection of formula etc. are the several difficulties in the construction of Index Numbers.

Answered by afrasimran

Answer:

They are simply rough indications of the relative changes. The choice of representative commodities may lead to fallacious conclusions as they are based on samples. There may be errors in the choice of base periods or weights, etc.

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