Distinguish between Quantity index number and Value index number.
Q.2 (B) (iii) Distinguish between Quantity index number and Value index number.
1 answer
Best answer
Answer: Distinguish between Quantity index number and Value index number
| Points | Quantity index number | Value index number |
|---|---|---|
| Meaning | Measures changes in the quantity of goods produced, sold or consumed over time. | Measures changes in the total value (price × quantity) of goods over time. |
| Variable | Only quantity changes are studied; prices are used as weights. | Both price and quantity changes are studied together. |
| Formula | \(Q_{01} = \dfrac{\sum q_1 p_0}{\sum q_0 p_0}\times 100\) (Laspeyres’) | \(V_{01} = \dfrac{\sum p_1 q_1}{\sum p_0 q_0}\times 100\) |
| Use | Measures changes in agricultural and industrial output, e.g. index of industrial production. | Measures changes in value of foreign trade, sales, etc. |
Doubtly AI
· 28 Oct 2026
AI-verified · Oct 2026
Report
Was this answer helpful?
Thanks for the feedback.
Sign up free to save answers and ask your own doubts
Your answer
Log in or create a free account to answer this question.