Question

Fill in the blanks by using proper substitutes given in the bracket.

1) The index number for the base year is _____
(00 / 150 / 100 10)

2) Index numbers are ______ barometers.
(statistical / mathematics / economic / social)

3) The ratio of current year price to base year price multiplied by 100 is called _________ .
(relatives / percentage / price relatives / quantity relatives)

4) Index numbers are ________averages.
(multiple / simple / specialised / joint)

Answer 1

1. The index number for the base year is 100

Explanation
The base year is the year in relation to which the changes in the current year are measured. The index number for the base year is always taken as 100.

2. Index numbers are economic barometers.

Explanation
Index numbers are used to measure economic performance and other economic variables of an economy, when compared in different periods of time. They are called the economic barometers of a country.

3. The ratio of current year price to base year price multiplied by 100 is called price relative.
Explanation
Price relative implies the ratio of the current year prices to base year prices multiplied by 100. Algebraically,

$\mathrm{Price}relatives=\frac{P_1}{P_0}\times 100$

4. Index numbers are specialised averages.
Explanation
Index numbers are measures that are used to calculate the changes in variables with reference to different time periods. These numbers are constructed for special purposes such as to calculate import-export index and wholesale price index. Also, the arithmetic mean is generally used for their construction. Thus, they are considered specialised averages.