# Index Numbers Economics Revision Notes

Please refer to Assignments Class 11 Economics Index Numbers Chapter 8 with solved questions and answers. We have provided Class 11 Economics Assignments for all chapters on our website. These problems and solutions for Chapter 8 Index Numbers Class 11 Economics have been prepared as per the latest syllabus and books issued for the current academic year. Learn these solved important questions to get more marks in your class tests and examinations.

## Index Numbers Assignments Class 11 Economics

1. Meaning: Index numbers is a statistical tool for measuring relative change in a group of related variables over two or more different times.

2. Features of an Index Number
a. They are expressed in percentages.
b. They are special types of averages.
c. They measure the effect of change over a period of time.

3. Problems in construction of Index Numbers
a. Defining the purpose of index numbers
b. Selection of items
c. Selection of base period
d. Selection of prices
e. Selection of weights
f. Choice of an average
g. Choice of the formulae

4. Price index are of two types
a. Simple Index Number
b. Weighted price Index numbers

5. Construction of simple Index Numbers:-
There are two methods
a. Simple aggregate Method

b. Simple Average of price relative method

6. Weighted Index Numbers
There are two methods:-
a. Weighted Aggregate method:- In this method commodities are assigned weights on the basis of quantities purchased.

b. Weighted Average of Price Relative Method:-
Under this method commodities are assigned weight or the basis of base’s year value (W= P0 Q 0 ) or fixed weights (W) are used.

7.

a. Consumer Price Index:- (CPI) The methods of constructing CPI are

8. Uses of Consumer Price Index:- (CPI)
a. It is used in calculating purchasing power of money
b. It is used for grant of Dearness Allowance.
c. It is used by government for framing wage policy, price policy etc.
d. CPI is used as price deflator of income
e. CPI is used as indicator of price movements in retail market.

9. Wholesale Price Index (WPI):-
a. It measures the relative change in the price of commodities traded in wholesale market.
b. It indicates the change in the general price level.
c. It does not include services

Uses of WPI
a. Basis of Dearness Allowance
b. Indicator of changes in economy
c. Measures the rate of inflation

10. Index Number of Industrial Production (IIP)
It indicates the changes in level of Industrial production or a percentage change in physical volume of output of commodities in following industries
a. Mining
b. Quarrying
c. Manufacturing
d. Electricity etc.,

W = relative importance of different output.
q0 = Base year quantity.
q1= Current Year Quantity.

11. Uses of Index Numbers.
a. Helps us to measure changes in price level
b. Help us to know changes in cost of living
c. Help government in adjustment of salaries and allowances