Practice Meaning Of Index Numbers (11.2.1) - Index Numbers and Moving Averages

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6 sample questions

Question 1.
What is an index number?
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Think about how we measure changes over time.
Question 2.
Why do we use a base period?
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Consider how we measure progress.
3Question 3.
What does an index number of 150 signify?
- A 50% increase
- A 150% increase
- A 150% decrease
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Subtract 100 from 150.
4Question 4.
True or False: The base period is always the previous year.
- True
- False
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Think of various timeframes that can be chosen as base.
Question 5.
Consider a scenario where the price index of a commodity in 2020 was 100. By 2022, it rose to 150. Calculate the percentage increase and discuss what this indicates about the commodity's market.
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Use the formula: ((new value - old value) / old value) * 100.
Question 6.
If the value index number was 90 last year and is now 110, how would you explain the economic implications of this change in terms of consumption patterns?
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Consider the factors that might contribute to the change in consumption.

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