Q.Write a short note on: Index numbers.

Index numbers are statistical measures expressing the relative change in a variable or group of variables over time compared with a base period set at 100. Types include price, quantity and value index numbers, and they are used to measure changes in prices, the cost of living and production. This is an AP Intermediate 2nd-year Economics (statistics) topic.

Meaning: An index number is a statistical measure that shows the relative change in the value of a variable, or a group of related variables, between two different times, places or situations. The period with which the comparison is made is called the base period, and its value is taken as 100; the value of any other period is expressed as a percentage of this base.

Types of index numbers:

1. Price index numbers — measure changes in the level of prices over time, for example the wholesale price index or the consumer price index (cost-of-living index).
2. Quantity (volume) index numbers — measure changes in the physical quantity of goods produced, consumed or sold, such as the index of industrial production.
3. Value index numbers — measure changes in the total value (price multiplied by quantity) of goods. …