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# PPT - Index Numbers Commerce Notes | EduRev

## Commerce : PPT - Index Numbers Commerce Notes | EduRev

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Introduction Involved in the construction of Index
Numbers
Construction of Index number
Methods of Index Numbers
Usefulness of Index Numbers
Page 3

Introduction Involved in the construction of Index
Numbers
Construction of Index number
Methods of Index Numbers
Usefulness of Index Numbers
An index number is a ratio or an average of
ratios expressed as a percentage two or more
time periods are involved, one of which is base
time period.
The value of the base time period serves as the
standard point of composition
Page 4

Introduction Involved in the construction of Index
Numbers
Construction of Index number
Methods of Index Numbers
Usefulness of Index Numbers
An index number is a ratio or an average of
ratios expressed as a percentage two or more
time periods are involved, one of which is base
time period.
The value of the base time period serves as the
standard point of composition
Selection of data
Selection of a Base Year
Type of Formula
Selection of Weights
The Data for Index Numbers
Choice of Variables
Page 5

Introduction Involved in the construction of Index
Numbers
Construction of Index number
Methods of Index Numbers
Usefulness of Index Numbers
An index number is a ratio or an average of
ratios expressed as a percentage two or more
time periods are involved, one of which is base
time period.
The value of the base time period serves as the
standard point of composition
Selection of data
Selection of a Base Year
Type of Formula
Selection of Weights
The Data for Index Numbers
Choice of Variables
1
• Specialized Averages
2
• Measure the net change in a group
of related variables
3
• Measures the effect of changes
over a period of time
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