Index Numbers

Question 1

Indexation

Answer 1

Using index numbers enables us to compare numbers easily over a period of time, e.g. a set of GDPs or price levels over several years.

To create an index from a series of absolute values:

• Choose a base year and set the index in that base year equal to 100.
• Divide the absolute value in all future years by the base year and multiply by 100 to get the index numbers for those years.

Question 2

Example

Answer 2

Question 3

Calculating growth rates

Answer 3

Question 4

The consumer prices index

Answer 4

Question 5

The consumer prices index

Answer 5

Question 6

Question 7