Page 2 - Home Assignment-Index No

Agricultural Production Index
Index number of agricultural production is weighted average of quantity relatives.

Sensex
Sensex is the index showing changes in the Indian stock market. It is a short form of a
Bombay Stock Exchange sensitive index. It is constructed with 1978-79 as the
reference year or the base year. It consists of 30 stocks of leading companies in the
country.

Purpose of Constructing Index Number

 Purpose of constructing index number of prices is to know the relative change or
percentage in the price level over time. A rising general price level over time is a
pointer towards inflation, while a falling general price level over time is a pointer
towards deflation.
 Purpose of constructing index number of quantity is to know relative change or
percentage change in the quantum or volume of output of different goods and
services. A rising index of quantity suggests a rising level of economic activity and
vice-versa.