write a note on definition and notation of index number
Answers
Answer:
An Index Number is defined as a relative measure to compare and describe the average change in price, quantity value of an item or a group of related items with respect to time, geographic location or other characteristics accordingly.
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Answer:
An Index Number is defined as a relative measure to compare and describe the average change in price, quantity value of an item or a group of related items with respect to time, geographic location or other characteristics accordingly.
Step-by-step explanation:
In its most general definition, an index number is a value representing the relative variation of a variable between two determined periods (or situations). The simple index numbers should be distinguished from the composite index numbers. Simple index numbers describe the relative change of a single variable.
An index number is an economic data figure that reflects quantity or price compared with a base or standard value. The base is usually 100, and refers either to a date, a specified price, a level of production, etc. ... Inflation, for example is measured by an index of retail (consumer) prices.
× Index number in statistics is the measurement of change in a variable or variables across a determined period. It will show general relative change and not a directly measurable figure. An index number is expressed in percentage form
Index numbers measure the net change among the related variables over a period of time or at two or more places. For example, change in prices, production, and more, over the two periods or at two places. Simple averages like, mean, median, mode, and more can be used to compare the variables having similar units.
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.