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Index Numbers

Question
CBSEENST11024686
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Explain the importance of stock statistics in Economy.

Solution

Importance of Index Numbers :

Index Numbers have a great importance in statistics. They are used in the various fields of economics such as production, consumption, price, etc. With the help of statistics, economic conditions can be studied and forecast can be made. They are called the “Economic Barometer”. Their importance can be judged with the following facts.

1. Calculation of price levels:Index Numbers help in calculating the price levels of various items.

2. Helpful in taking decisions:Index Numbers are very helpful to Government in taking important decisions such as granting dearness allowances to the employees.

3. Helpful in comparative study:They also help us in making comparative study of the changes occurring in the economy.

4. Helpful to insurance companies and Banking Institution:Index Numbers help the insurance companies and banking institutions in determining of premium-rates and interests respectively.

5. Helpful in assessing the development of an economy:With the help of statistics, the development of an economy can be assessed.

Some More Questions From Index Numbers Chapter

 The item having the highest weight in consumer’s price index for industrial workers is:

consumer price index measures changes in:

The wholesale price index.

D.A. paid to the workers is based on:

 

Why do we need an index number?

Why is it essential to have different CPIs for different categories of consumers?

What does a consumer price index for industrial workers measure?

What is the difference between a price index and a quantity index?

Is the change in any price reflected in price index number?

Can the CPI for urban non-manual employees represent the changes in the cost of living of the President of India?

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