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State with reason whether you agree or disagree with the following statement: Index numbers are free from limitations. - Economics

MCQ
True or False

State with reason whether you agree or disagree with the following statement:

Index numbers are free from limitations.

Options

  • Agree

  • Disagree

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Solution

I disagree with the above statement.

Reason:

Index numbers are generally based on samples. We cannot include all the items in the construction of the index numbers. Hence they are not free from sampling errors.

Concept: Limitations of Index Numbers
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APPEARS IN

Balbharati Economics 12th Standard HSC Maharashtra State Board
Chapter 6 Index Numbers
Exercise | Q 5. (2) | Page 60
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