Explain the features of Index Numbers. ?

1.	Explain the features of Index Numbers. ?
Answer» Features of Index Numbers: Index numbers are a specialised form of averages. They are expressed in percentage form without using a percentage sign. The year for which index number is being prepared is the current year. The year from which index number is being prepared is called the base year which is always taken as 100. They are used in measuring the changes in magnitudes which cannot be measured directly. The formula used for Price Index Number = \(\cfrac{Total\, Price\, of\, the\, Current\, year}{Total\, Price\, of\, the\, base\, year} \times 100\) They are considered as barometer of economic activity. Index number which is calculated from a single variable is called “univariate • index” and which is constructed from a group of variables is called a “composite index”.

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Features of Index Numbers:

Index numbers are a specialised form of averages.
They are expressed in percentage form without using a percentage sign.
The year for which index number is being prepared is the current year.
The year from which index number is being prepared is called the base year which is always taken as 100.
They are used in measuring the changes in magnitudes which cannot be measured directly.
The formula used for Price Index Number = \(\cfrac{Total\, Price\, of\, the\, Current\, year}{Total\, Price\, of\, the\, base\, year} \times 100\)
They are considered as barometer of economic activity.
Index number which is calculated from a single variable is called “univariate • index” and which is constructed from a group of variables is called a “composite index”.

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