Index Numbers Flashcards
(5 cards)
1
Q
What is an index number?
A
A statistical measure showing the relative change in a variable (or group of variables) over time, with a chosen base period set to 100.
2
Q
Why do we use index numbers?
A
They simplify large, unwieldy numbers (e.g., house prices, GDP).
They allow quick, easy comparisons of how values rise or fall over time.
3
Q
What is the base period in an index series?
A
The reference period whose index value is set to 100; all other periods’ values are measured relative to this.
4
Q
How do you calculate an index number?
A
Raw number
Base Year raw Number x100
5
Q
How do you compute the percentage change from one year’s index to the next?
A
%= Difference
Original x100
