An index number which accounts for the relative importance of the items is known as

(i) weighted index

(ii) simple aggregative index

(iii) simple average of relatives

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An index number which accounts for the relative importance of the items is known as weighted index

An index number in which different items of the series are accorded weight age according to their relative importance is known as Weighted Index Numbers. It is the weighted average of the prices of different goods.

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Q. The relative importance of the items is accounted for in the index number.

The drawbacks of the simple aggregative method are:

(I) The items with large unit prices have greater influence on the index.

(II) No weightage is given to the relative importance of the items.

(I) A rising price index implies a growing level of economic activity.

(II) Simple index number can be constructed only by the simple aggregative method.

Q. Construct the index number for 1991 taking 1990 as the base year from the following data by simple average of price relative method.

Commodity	A	B	C	D	E
Price in 1990	100	80	160	220	40
Price in1991	140	120	180	240	40

Calculate weighted index number for 2010 by weighted aggregative method and weighted average of relative method for the following data:

$\begin{matrix} Items & Weights & Prices in 2011 & Prices in 2012 A & 10 & 100 & 161 B & 7 & 200 & 210 C & 15 & 50 & 60 D & 9 & 20 & 30 E & 10 & 10 & 14 \end{matrix}$

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An index number which accounts for the relative importance of the items is known as (i) weighted index (ii) simple aggregative index (iii) simple average of relatives

An index number which accounts for the relative importance of the items is known as

(i) weighted index

(ii) simple aggregative index

(iii) simple average of relatives