Question

Answer in two or three sentence.
What do you mean by index number ?

Answer 1

An index number is the measure of change in a variable (or group of variables) over time.

It is typically used in economics to measure trends in a wide variety of areas including: stock market prices, cost of living, industrial or agricultural production, and imports.

Index numbers are one of the most used statistical tools in economics.

Index numbers are not directly measurable, but represent general, relative changes. They are typically expressed as percents.

In a simple way,

”An Index Number is a statistical measure designed to show changes in variable or a group of related variable with respect to time, geographical locations or other characteristics”.