Uses Of Index Numbers Flashcards
1
Q
What is an index number?
A
-Index numbers are used to make comparisons between years and to measure the magnitude of change over time.
2
Q
What is the calculation used for the calculation of CPI?
A
(Pn/P0) x 100
PO is the price level in the base year and Pn is the price in the year being compared.
3
Q
How are weightings for Consumer price index assigned?
A
Using this formula:
QO is the quantity being compared
Pn is the price level of the base year
PO is the original price o the unit.
P = Price.
Q= Quantity.
