Index numbers Flashcards
1
Q
What are index numbers
A
- a statistical technique to help economists interpret, analyse and compare large numbers
2
Q
What is the ‘base’ year always equal to
A
100
3
Q
how to calculate simple % change from base year
A
(new/base) x 100
4
Q
how to calculate index value without base number value
A
(current year raw value/previous year’s raw value) x previous year’s index value
5
Q
what is a weighted index
A
- an average index made up of multiple indices
6
Q
how to work out weighted index
A
1-multiply weight by price index for each category
2- add together
3- divide by whatever weights are a proportion of
