Question

Describe the uses of index number. What considerations are taken into account while selecting the base year for the preparation of an index number ?

Answer 1

1 .Index numbers are used in the fields of commerce, meteorology, labour, industry, etc. 2. Index numbers measure fluctuations during intervals of time, group differences of geographical position of degree, etc. 3. Index numbers are used in the fields of commerce, meteorology, labour, industry, etc. 4. Index numbers measure fluctuations during intervals of time, group differences of geographical position of degree, etc. 1. the base period should be normal year. 2. it should be neither too short nor too long. 3. it should not be the period for which actual data are not available. 4. it should not be too far back in the past.