State with reasons whether you agree or disagree with the following statement (any three): There are many types of index numbers.

Answer: I agree with the statement.

Reasons: Index numbers measure relative changes in variables over time, and different types are constructed for different purposes:

1. Price index numbers: measure changes in prices, e.g. wholesale price index, consumer price index.
2. Quantity index numbers: measure changes in the physical volume of production, sales or consumption, e.g. index of industrial production.
3. Value index numbers: measure changes in total value (price × quantity), e.g. value of exports or sales.
4. Special purpose index numbers: e.g. cost of living index, sensex, human development index.

Further, index numbers may be simple or weighted. Thus there are many types of index numbers.