# Index Numbers- Unweighted

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• Q1

Define base year.

Marks:1

Base year is the year with reference to which prices of the current year are compared to construct index number.

• Q2

In 2010, the price of commodity X was 20 and in 2015, it was 35, the relative change is

Marks:1

Relative change in prices is the difference of prices in relation to the base year price., i.e., (35-20) divided by 20 or 15 divided by 20 which is equal to 0.75.

• Q3

Define index number.

Marks:1

An index number is a statistical tool for measuring changes in the magnitude of a group of related variables. It is a measure of the average change in a group of related variables over two different situations.

or

An index number is a specialised average designed to measure the net change in a group of related variables over a period of time.

• Q4

What is meant by relative change?

Marks:1

Relative change in prices is the difference of prices in relation to the base year price.

Relative change is equal to actual differences of prices divided by base year price.

• Q5

What do you mean by actual difference?

Marks:1