Balbharati solutions for Economics HSC 12th Standard Maharashtra State Board
Chapter 6. INDEX NUMBERS
Q.4. Distinguish between:
1. Simple Index Numbers and Weighted Index Numbers
Simple Index Numbers | Weighted Index Numbers |
In this method, every commodity is given equal importance. It is the easiest method for constructing index numbers.
| In this method, suitable weights are assigned to various commodities. It gives relative importance to the commodity in the group. In most of the cases ‘quantities’ are used as weights. |
This method can be applied to determine the Price Index Number, Quantity Index Number, and Value Index Number. | There are various methods of constructing weighted index numbers such as Laaspeyre’s Price Index, Paasche’s Price Index, etc.
|
