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Measuring Trends: Index Numbers in Class 11
Index number is a specialised average used to measure the change in the level of any variable with respect to time or some other variable.
Index numbers are expressed as a ratio or a percentage.
They help in forecasting economic activity.
The types of index numbers are
Unweighted index numbers
i) Simple Aggregate index numbers
ii) Simple average of Price Relatives
Weighted index numbers
i) Weighted Aggregate
ii) Weighted Average of Price Relatives
Moving Averages are used in cyclical variations to eliminate fluctuations due to cyclical changes in time series.
3 yearly moving averages
5 yearly moving averages
4 yearly moving averages
6 yearly moving average
7 yearly moving average
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