Answer in Brief
State with reason whether you agree or disagree with the following statement:
Index numbers measure changes in the price level only.
I disagree with the above statement.
- An index number is a device to measure changes in the economic variables (or groups of variables) over a period of time.
- Index numbers are one of the most used statistical tools in economics.
- Index numbers were originally developed to measure changes in the price level.
- 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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