Question

Index number for the base period is always taken as ______

Answer 1

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 $\underset{}{\sum P_1}$be the value of commodity in current period

Let $\underset{}{\sum P_0}$be the value of commodity in base period

The, $P=\frac{{\displaystyle \underset{}{\sum P_1}}}{{\displaystyle \sum _{}}{P}_0}\times 100$

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

$\Rightarrow$$\underset{}{\sum P_1}$$=$$\underset{}{\sum P_0}$

$\Rightarrow$ $P=1\times 100=100$

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