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Index numbers
Quantity indices
3.1 Simple quantity indices
For a single product
Quantity in any given year Q 1
Quantity Index = × 100 = × 100
Quantity in base year Q 0
3.2 Relative quantity indices
For a collection (“basket”) of products
∑[ ×( / )]
Relative quantity Index = × 100
∑
“W”s are weights – e.g. typically prices of products
Weights can be derived from quantities in the base year (“base weighted”) or
current year (“current weighted”)
3.3 Aggregate quantity indices
∑ ×
Aggregate quantity Index = × 100
∑ ×
Question 7
If the quantity of a product sold has risen from 1,200 units in 2012 to 1,400 units
in 2016, express the units sold in 2012 as an index with a base year of 2016.
Quantity in any given year
Quantity Index = × 100 = × 100
Quantity in base year
2012 index = 1,200/1,400 × 100 = 85.7
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