Index numbers make it possible to compare

Different variable in relative forms

Explanation:

Index numbers allow to compare the relative values of different values.

To do so, an index is made by equating a value to a base value, usually a value of 100, and other variables that are to be compared with the index value are expressed in terms of how different or far they are from the base value.

For example, suppose that inflation for year 1 is 4%, and this is indexed to be the base value 100. If inflation for year 2 is 8%, then, the inflation value is 200 in terms of the index, or twice as much as the value of the base year.

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