Question

What are the problems arising in constructing index numbers?

Answer 1

Thank you for your question. let me help in finding the true answer.
 
There are many difficulties of arising in constructing index numbers. They are given below.
Problem of selecting base period.
problem of collecting prices.
Problem of selecting the things or commodities.
Problem of selecting the method of average.
problem arising from changing overtime.
Problem of weight assigning.
Also, difficulty of comparison internationally.
Difficulty of comparing different places.

I hope this will help you.

Answer 2

Step-by-step explanation:

1. purpose of index numbers:- They are various type of index number constructed with different objectives. before constructing an index number one must define the objective. the construction of index number is significantly by the objective or purpose of the study .

2. Selection of Base Year:- Section of Base Year is another problem in the construction of index number. Base Year is the difference year. It is the year with which price of the current year are compared.

3. Selection of Goods and Services:- it is neither possible nor desirable to include all the goods and services produced in the country. We have to choose those goods and services which represent most of other in the market.