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**Base shifting**

Shifting of base period or reference period of the index is known as base shifting. This can be done using the following relation as,

**Example **The following are the index numbers of a commodity taking 1991 as the base.

Find the index numbers by changing the base to 1994.

**Solution**

**Splicing** The process of combining two or more index numbers covering different bases into a single series is called splicing.

Suppose we have two series A and B, and if series A is spliced with B, then

If series B is spliced with A, then

**Example **The following are two series A and B of the index numbers of a commodity taking 1991 and 1994 as the base years.

a. Splice the index series of A to B

b. Splice the index series of B to A

**Solution a.** Index series A spliced with index series B

**b. **Index series B spliced with index series A

**Deflating**

It is a technique used to make allowances for the effect of changing price values. It is used to measure the purchasing power of money.

It can also be found using the relation

**Example **The table below shows the income of a company and its price index taking the year 1991 as the base.

Calculate the deflated value for every year taking 1991 as the base.

**Solution**

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