What Are Index Numbers? What Are The Uses Of Index Numbers?
Index number is a device, which is designed to measure changes in a variable or group of related variables with respect to time, geographic location or other characteristic, which cannot be measures directly. Index number may be simple or composite. Simple index number is computed to measure a relative change in single variable with respect to a base. Composite index number is computed to measure average change in a group of related variables with respect to base. There are some uses of index numbers. To measure the average change in retail or wholesale prices or commonly or a group of commodities. To measure change in volume or quantity of goods produced or goods imported or exported. Index numbers are used to measure changes in a cost of living or total industrial production. The cost of living index numbers or consumer price index number is used to measure the effect of rise of fall prices on the general standard of living. Index numbers are used for forecasting. Index numbers are u
