Index Number Diploma For Free

An Index Number in which each item must have some weight as, no weight is expressly assigned to any item is known as Unweighted Index Number. It is also known as Simple Index Number and can be constructed with the help of two techniques; viz., Simple Aggregative Method and Simple Average of Price Relatives Method.

An index number is a method of evaluating variations in a variable or group of variables in regards to geographical location, time, and other features. The base value of the index number is usually 100, which indicates price, date, level of production, and more. There are various kinds of index numbers.

There are five major steps included in the construction of CPI, are as follows: Determination of the basket of goods. Finding the price of goods in each year. Cost of the basket of goods each year. Selection of base year and calculation of CPI. Calculation of inflation in comparison of prices with the previous year.

Index numbers are expressed in percentage form. The main characteristics of index numbers are as follows: Index number is a form of average that measures relative changes in the instances where absolute measurement is not possible.

Table of content 2.1 Unweighted Index: Simple Aggregate Method. 2.2 Unweighted Index: Simple Average of Quantity Method. 2.4 Weighted Index : Weighted Average of Relative Method.

Indices are the small numbers in the top right corner of a number and raise your base to a power, e.g. 24 = 16 because it means 2x2x2x2.

Index numbers are used to show relative values ? a change in a variable relative to a base point in time. Index data uses a base (usually 100). Index numbers have no units. If you wanted to calculate the percentage change from the base you would just subtract 100, e.g. Year 1 = 100, Year 3 = 110.