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What is the rule that allows us to add the exponents of factors whose base numbers are the same?
It is one on the "index laws".
What is the formula for chain base index numbers?
(price of commodity in the given year/ price of the commodity in preceding year) * 100
Discuss the importance of index number?
ndex numbers are basically economic data figures that reflect the price or quantity compared with standard or base value. It is normally expressed as 100 times the ratio of the base value that equals 100. Index numbers are very important for economic analysis. They summarize movements in a group of related variables. The consumer Price index is one of the most commonly used form of index number. It measures the changes in the retail prices.
How do you work out the index number?
Index numbers are usually expressed by setting some selected value as 100 and converting all other numbers to an index relative to that base.So, for a simple index, if the value y(0) is set to 100, then the index for the value y(k) is y(k)/y(0)*100.The calculations become more complicated if the index is for a collection of items. In such cases, a number of different "sub-indices" need to be combined together. The combined index is calculated as a weighted average of the component sub-indices, with the weights based on the importance of each su-index in the base period (base-weighted) or in the current period (current-weighted).
What are the problems associated with the construction of index numbers under selected items?
what are the problems associated with the construction of index numbers
