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Define index number. Mention three limitations of index numbers. |
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Answer» Index number is a statistical measure designed to show an average change in a variable or group of related variables over a period. The limitations are: • Many formulae are used and they give different answers for the index. • As the customs and habits change from time to time, the use of commodities also vary. • There is an ample scope for bias in the construction of index number. |
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