what is an index number explain any two problems involved this constructing an index number
Solution:-
An index number is a statistical device used to measure changes in the related variables. In other words, index numbers helps in assessing the changes in the values of the variables over time in comparison to a particular year (base year).
Difficulties in the Construction of Index Numbers.
1. Purpose or objective of index number: before constructing an index number, it is essential to decide the purpose of its construction.
2. Selection of base year: while constructing an index number, it is necessary to choose an appropriate base year.
3. Reliable source of data: For the construction of suitable index numbers, the source from which the data is collected plays a crucial role.
4. Selection of goods and services: another issue pertaining to the construction of index number is the selection of items and services that are to be included.
An index number is a statistical device used to measure changes in the related variables. In other words, index numbers helps in assessing the changes in the values of the variables over time in comparison to a particular year (base year).
Difficulties in the Construction of Index Numbers.
1. Purpose or objective of index number: before constructing an index number, it is essential to decide the purpose of its construction.
2. Selection of base year: while constructing an index number, it is necessary to choose an appropriate base year.
3. Reliable source of data: For the construction of suitable index numbers, the source from which the data is collected plays a crucial role.
4. Selection of goods and services: another issue pertaining to the construction of index number is the selection of items and services that are to be included.