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Distinguish between Simple Index Numbers and Weighted Index Numbers. - Economics

Distinguish Between

Distinguish between

Simple Index Numbers and Weighted Index Numbers.

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Solution

  Simple index numbers Weighted index numbers
1) Simple index numbers is a method of constructing an index number in which every commodity is given equal importance. Weighted index numbers is a method of constructing an index number in which suitable weights are assigned to various commodities.
2) This method can be applied to determine the price index number, quantity index number, and value index number. The method can be applied to determine price index numbers and the special-purpose index numbers.
3) It is the easiest method for constructing index numbers. It is relatively complex as compared to simple index numbers.
Concept: Construction of Index Numbers
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APPEARS IN

Balbharati Economics 12th Standard HSC Maharashtra State Board
Chapter 6 Index Numbers
Exercise | Q 4. (1) | Page 60
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