Feature of index number

A feature of index number is a way to compare the changes in the value of a group of items over time. It helps us see if things are getting more expensive or cheaper. For example, let’s say you want to compare the prices of toys over the past 5 years. You could use an index number to see if the overall price of toys has gone up or down during that time. One way to calculate an index number is by using a base year. The base year is like a starting point that we compare everything to. If the index number is higher than 100, it means prices have gone up since the base year. If it’s lower than 100, prices have gone down. A verifiable fact is that index numbers are commonly used in economics and finance to track changes in prices, wages, and other important data.