7.6 - INDEX NUMBER IN ECONOMICS
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Practice Questions
Test your understanding with targeted questions
What is an index number?
💡 Hint: It measures relative changes.
What does CPI stand for?
💡 Hint: Think about the prices of goods for consumers.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What type of index accounts for relative importance?
💡 Hint: Think about budgeting and how some items are more important.
True or False: Index numbers can only measure price changes.
💡 Hint: Consider the definitions we've discussed.
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Challenge Problems
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Given prices of various items in two different years, construct a weighted price index that reflects their importance based on a given expenditure.
💡 Hint: Ensure you sum the weighted prices correctly.
Discuss how the choice of base year affects the interpretation of an index number.
💡 Hint: Think about how the economy was performing during different years when considering your base.
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