Q.Write a short note on: Index numbers.

An index number is a statistical device showing the relative change in a variable (or group of variables) like prices or production between a current period and a base period, with the base taken as 100. It is called an 'economic barometer'.

This is a 2-mark short note in AP Intermediate 2nd year Economics, part of the economic-statistics / index-numbers theme, treated in line with the NCERT/CBSE curriculum.

Meaning. An index number is a specialised statistical measure designed to show the relative change in the level of a variable, or a group of related variables, over time, place or other characteristics. It compares the value of the variable in a given period (the current period) with its value in a selected standard period (the base period). The base-period value is conventionally taken as 100, and the index number expresses the current-period value as a percentage of the base value. For example, if the price index for the current year is 120 with the base year as 100, it means that prices on the average have risen by 20 percent compared with the base year. Index numbers are used to measure changes in prices (wholesale and consumer price indices), industri …