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Index Numbers — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsIndex Numbers3 Marks
Question
What methods are used for constructing Consumer Price Index number?
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Answer

There are two methods of constructing Consumer Price Index number:
  1. Aggregative Method: This is the most popular method for constructing Consumer Price Index number, and is computed with the help of the following formula.
$\text{Consumer Price Index}=\frac{\Sigma\text{p}_1\text{q}_0}{\text{p}_0\text{q}_0}\times100$
  1. Family Budget Method: This method computes CPI on the basis of family budget, using the given formula.
$\text{Cunsumer Price Index }=\frac{\Sigma\text{IW}}{\Sigma\text{W}}$

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