Question
What is the difference between a price index and a quantity index?
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Price Index
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Quantity Index
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1.
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It measures general changes in prices between current year and base year.
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It measures average change in quantities and assists to compare changes in physical quantity of commodities produced and consumed.
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2.
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Two methods to calculate Price Index Number are:
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Two methods to calculate Quantity Index Number are:
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3.
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It is also known as unweighted index number.
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It is also known as weighted index number.
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4.
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It considers the prices of the commodity of both base year and current year.
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It considers the weights of commodity assigned according to the quantity.
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Year
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2005
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2006
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2007
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2008
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2009
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2010
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2011
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Export (₹ in crore)
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300
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320
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400
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350
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360
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250
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340
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Imort (₹ in crore)
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450
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300
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280
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375
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330
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450
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325
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District
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1
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2
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3
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4
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5
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6
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7
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8
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9
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10
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Wheat
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12
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10
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15
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19
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21
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16
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18
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9
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25
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10
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Rice
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22
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29
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12
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23
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18
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15
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12
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34
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18
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12
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| Class lnterval: | 0-10 | 10-20 | 20-30 | 30-40 | 40-50 |
| Frequency: | 8 | 13 | 16 | 8 | 5 |
| Commodity | Base Year | Current Year | ||
| Price (₹) | Quantity | Price (₹) | Quantity | |
| A | 2 | 10 | 4 | 5 |
| B | 5 | 12 | 6 | 10 |
| C | 4 | 20 | 5 | 15 |
| D | 2 | 15 | 3 | 10 |