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State with reason whether you agree or disagree with the following statement: Index numbers measure changes in the price level only. - Economics

Answer in Brief

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

Index numbers measure changes in the price level only.

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Solution

I disagree with the above statement.

Reason:

  1. An index number is a device to measure changes in the economic variables (or groups of variables) over a period of time.
  2. Index numbers are one of the most used statistical tools in economics.
  3. Index numbers were originally developed to measure changes in the price level.
  4. At the present time, it is also used to measure trends in a wide variety of areas such as stock market prices, cost of living, industrial and agricultural production, changes in exports and imports, etc.
Concept: Index Numbers
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APPEARS IN

Balbharati Economics 12th Standard HSC Maharashtra State Board
Chapter 6 Index Numbers
Exercise | Q 5. (1) | Page 60
SCERT Maharashtra Question Bank 12th Standard HSC Economics Maharashtra State Board 2021
Chapter 6 Index Numbers
State with reasons whether you agree or disagree with the following statements | Q 1
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