9.3 The Uses Of Index Numbers

Question 1

What is an index number?

Answer 1

Number used in an index, such as consumer prices index to enable accurate comparisons over time to be made

Question 2

How are changes in gdp and other economic variables expressed?

Answer 2

Using index numbers

Question 3

When do economists frequently use index numbers?

Answer 3

When making comparisons over periods of time

(Starts in a given year-base year index number is 100

(Index number of 105 would be a 5% increase)

Question 4

What is the name of the new price index introduced by the ONS in 2012 and what does it do?

Answer 4

CPIH

Counteract criticisms that the main weakness of the CPI is it does not reflect the costs of being a house owner (H stands for house)

Question 5

What price index does not relate to changes in consumer prices?

Answer 5

PPI (Producer price indices) measure changes in input and output prices of goods brought and sold by UK manufactures

Question 6

What is the best known published economic and financial indexes in the UK?

Answer 6

The FTSE 100

Question 7

What is the FTSE 100?

Answer 7

An index composed of the 100 largest companies listed on the London stock exchange

Question 8

What is the FTSE 100 used for?

Answer 8

It is a good performance indicator of major public companies