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Question

Index number for the base period is always taken as ______


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Solution

Define and calculate Index number for base period

Index Number: An index number is a statistical device for measuring changes in the magnitude of a group of related variables

Let P be the index number

Let P1be the value of commodity in current period

Let P0be the value of commodity in base period

The, P=P1P0×100

For calculating the Index number in base period, base period =current period

P1=P0

P=1×100=100

Hence, Index Number for the base period is always taken as hundred.


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