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Cheat sheet · Class 11 · CBSE · Commerce Economics

Statistics: Index Numbers cheat sheet

The whole chapter on one page: key formulas, facts and the points to remember, for quick revision before a test.

CBSE Class 11 · Economics

Cheat sheet

Chapter 7Statistics: Index Numbers

Laspeyres uses base-year quantities; Paasche uses current-year quantities.

1. Price Index Formulas

P01=∑p1∑p0×100P_{01} = \dfrac{\sum p_1}{\sum p_0}\times100 (simple aggregative)
P01=∑p1q0∑p0q0×100P_{01} = \dfrac{\sum p_1q_0}{\sum p_0q_0}\times100 (Laspeyres)
P01=∑p1q1∑p0q1×100P_{01} = \dfrac{\sum p_1q_1}{\sum p_0q_1}\times100 (Paasche)

2. Common Indices

IndexMeasures
CPIcost of living
WPIwholesale prices
IIPindustrial production
SENSEXBSE share prices (base 1978–79 = 100)

3. Uses

  • Measure inflation; adjust wages (DA).
  • Deflate national income to real terms.
  • Policy-making.

Inflation % = Xt−Xt−1Xt−1×100\dfrac{X_t - X_{t-1}}{X_{t-1}}\times100.

4. Key Points

  • Base year should be a normal year.
  • Weights reflect importance.
  • Index has no unit.
  • Real wage = money wage / CPI × 100.

Remember: Laspeyres vs Paasche | CPI, WPI, IIP | uses

Statistics: Index Numbers: questions and notes

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