In this article we will discuss about:- 1. Meaning of Index Numbers 2. Features of Index Numbers 3. Steps or Problems in the Construction 4. Construction of Price Index Numbers (Formula and Examples) 5. Difficulties in Measuring Changes in Value of Money 6. Types of Index Numbers 7. Importance 8. Limitations. Meaning of Index Numbers: The value of money does [...]
The following points highlight the seven major problems of index numbers. The problems are: 1. Inadequate Coverage 2. Choice of Weights 3. Choice of Base Year 4. Inaccuracy 5. Income Variation 6. The Time Factor 7. Comparability. Problem # 1. Inadequate Coverage: The first problem lies in the fact that it is impossible to cover all commodities and their price. [...]
Let us study about the Index Number of Prices. After reading this article you will learn about: 1. Meaning of Index Number of Prices 2. Method of Constructing an Index Number of Prices 3. Uses 4. Limitations. Meaning of Index Number of Prices: An index is a number which shows how average of commodity prices (wholesale or retail prices), wages, [...]