- This topic has 5 replies, 2 voices, and was last updated 6 years ago by
John Moffat.
John Moffat.-
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Hussain
- Topics: 24
- Replies: 25
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When finding index numbers how should we know which number to put in numerator and which number to put in denominater and then as usual multiplying by hundred??? Whats the logic behind it? Similarly is the case for when we are given index numbers and have to find price in any specific year i.e. what to put in numerator and denominater
John Moffat
- Topics: 57
- Replies: 50561
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You need to watch my free lectures on index numbers – I cannot type out all the lectures here 🙂
Our lectures are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well.
Hussain
- Topics: 24
- Replies: 25
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I have seen the lecture. I think you didin’t understand my question. For example “in example 1 to find index number in 2008 you inserted price of coffee in 2008 in numerator and 2006 in denominator then as usual multiplying by base i.e.100 so iam asking why did you put price of 2008 in numerator? Why not as denominator Or how should we know which figure to put in numerator which to put in denominator
John Moffat
- Topics: 57
- Replies: 50561
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The denominator is the base period – the one we are trying to compare the current value with.
Hussain
- Topics: 24
- Replies: 25
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My actual question is How should we able to identify whether to put which figure in numerator and which figure in denominator in any kind of question of index numbers??? The above given question was just an example to explain my question to you.
John Moffat
- Topics: 57
- Replies: 50561
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But I have answered – you always calculate the index number by reference to whatever is the base period. The denominator is the base period.
Hussain
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