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 Page 1


INDEX NUMBERS
Page 2


INDEX NUMBERS
CONTENTS
?
Introduction
?
Definition
?
Characteristics
?
Uses
?
Problems
?
Classification
?
Methods
?
Value index numbers
?
Chain index numbers.
Page 3


INDEX NUMBERS
CONTENTS
?
Introduction
?
Definition
?
Characteristics
?
Uses
?
Problems
?
Classification
?
Methods
?
Value index numbers
?
Chain index numbers.
INTRODUCTION
?
An index number measures the relative change 
in price, quantity, value, or some other item of 
interest from one time period to another. 
?
A simple index number measures the relative 
change in one or more than one variable. 
Page 4


INDEX NUMBERS
CONTENTS
?
Introduction
?
Definition
?
Characteristics
?
Uses
?
Problems
?
Classification
?
Methods
?
Value index numbers
?
Chain index numbers.
INTRODUCTION
?
An index number measures the relative change 
in price, quantity, value, or some other item of 
interest from one time period to another. 
?
A simple index number measures the relative 
change in one or more than one variable. 
WHAT IS AN INDEX NUMBER
Page 5


INDEX NUMBERS
CONTENTS
?
Introduction
?
Definition
?
Characteristics
?
Uses
?
Problems
?
Classification
?
Methods
?
Value index numbers
?
Chain index numbers.
INTRODUCTION
?
An index number measures the relative change 
in price, quantity, value, or some other item of 
interest from one time period to another. 
?
A simple index number measures the relative 
change in one or more than one variable. 
WHAT IS AN INDEX NUMBER
DEFINITION
 
?
“Index numbers are quantitative measures of 
growth  of  prices,  production,  inventory  and 
other quantities of economic interest.”
?
         
­Ronold
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FAQs on PPT - Index number - Business Mathematics and Statistics - B Com

1. What is an index number?
Ans. An index number is a statistical measure used to track changes in a specific variable or group of variables over time. It is used to quantify and compare changes in various economic, social, or other data over different periods. Index numbers are commonly used to analyze price movements, economic indicators, and market trends.
2. How are index numbers calculated?
Ans. Index numbers are calculated by comparing the value of a variable or group of variables at a specific time (base period) with its value at another time (comparison period). The calculation involves dividing the value of the comparison period by the value of the base period and multiplying the result by 100. This calculation standardizes the data and allows for meaningful comparisons and analysis.
3. What are the applications of index numbers?
Ans. Index numbers have various applications in different fields. In economics, they are used to measure inflation, track changes in consumer prices, and analyze economic indicators like GDP. In finance, index numbers are used to monitor stock market performance and calculate price indices for investment analysis. They are also used in population studies, social sciences, and market research to understand trends and patterns.
4. What are the limitations of using index numbers?
Ans. While index numbers are a useful tool, they also have limitations. One limitation is the choice of base period, which can impact the interpretation of the results. Another limitation is the weighting of different variables, which may not accurately reflect their importance. Index numbers also assume a linear relationship between variables, which may not always hold true. Additionally, changes in the quality of goods or services can affect the accuracy of index numbers.
5. How do index numbers help in decision-making?
Ans. Index numbers provide valuable information for decision-making processes. They allow policymakers, businesses, and individuals to understand and analyze trends, patterns, and changes in data. By comparing index numbers over time, decision-makers can assess the impact of policies, make informed predictions, and identify areas of concern or opportunities. Index numbers help in monitoring and evaluating performance, setting targets, and formulating strategies based on reliable data analysis.
115 videos|142 docs
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