Chapter 1- Data Analysis

Question 1

What is an index number?

Answer 1

Used to make numerical data easiser to understand

Question 2

How does an index work?

Answer 2

An index starts in a given year (the base year) at an index of 100

Question 3

What happens when there is a percentage increase?

Answer 3

Percentage increase pushes the index number above 100

E.g. 102= 2% rise from the base year

Question 4

What happens when there is a percentage decrease?

Answer 4

Percentage decreases pushes the index number below 100

E.g. 98= 2% fall from the base year

Question 5

What is the formula for index number?

Answer 5

Value/ Base year X 100

Question 6

What is the advantage of using index numbers?

Answer 6

Make the value of the changes clear

This sort of data is useful to managers as it can potentially indicate how much wages and price should change by

Question 7

How are index number useful?

Answer 7

Useful way of presenting data as it makes it a clearer way of showing data and growth within a business