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INDEX NUMBERSINDEX NUMBERS
•SPECIAL AVERAGE DESIGNED TO MEASURE THESPECIAL AVERAGE DESIGNED TO MEASURE THECHANGE IN A GROUP OF RELATED VARIABLE OVER ACHANGE IN A GROUP OF RELATED VARIABLE OVER APERIOD OF TIME.PERIOD OF TIME.FEATURES:-FEATURES:-1] Special type of averages.1] Special type of averages.2] Measured in percentages2] Measured in percentages3] Change may be single variable or a group of variables.3] Change may be single variable or a group of variables.4] Used for comparison.4] Used for comparison.5] Capable of measuring special changes;-cost of living and5] Capable of measuring special changes;-cost of living andprices.prices.
 
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IMPORTANCE OF INDEX NUMBER :-1] IN FRAMING ECO POLICIES-InIndustries,its directors would wish toknow about supply and wage distribution.Govt has to study price n cost of livingindex for future planning of country.2] MEASURING PRICE LEVEL OVER APERIOD OF TIME.Value of money is inversely proportionalto price level.Purchasing power is value of money.
 
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3]USEFUL IN DEFLATING:-they r usedto adjust the original data for pricechanges or to adjust the original datafor cost of living changes n thustransform nominal wages to real wages.
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