Index Numbers Flashcards
What are index numbers?
Index numbers are a useful way of expressing economic data over time series and comparing/contrasting information.
What does an index number reflect?
An index number is a figure reflecting price or quantity compared with a base value.
What is the base value for index numbers?
The base value always has an index number of 100.
How is an index number expressed?
The index number is expressed as 100 times the ratio to the base value.
Do index numbers have units?
No, index numbers have no units.
What are some examples of index numbers?
Examples include Consumer Price Index, Sterling effective exchange rate index, Big Mac index, Human Development Index.
How do you calculate the rate of change in an economic variable?
The percentage change is calculated as (new - old) / old x 100.
