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Textbook
Introduction
1. Goals and decisions of an organization
2. The market system
3. The domestic economy
4. Macroeconomics – The international economy
5. Macroeconomics – Index numbers
5.1 Introduction
5.2 Index numbers
5.3 Relative indices
6. Introduction to the financial context of business entities
7. Foreign currencies
8. Investment appraisal
9. Summarizing and analyzing data
10. Inter-relationships between variables
11. Time series model
Wrapping up
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5.1 Introduction
CGMA BA1
5. Macroeconomics – Index numbers
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Introduction

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This chapter introduces index numbers - what they are, how to calculate them, and how to use them to compare values over time.

You’ve probably seen business news report changes in asset values using an index (like a stock market index). Those index-based summaries are exactly the kind of idea you’ll learn to interpret and create here.

Index numbers: definition and purpose

  • Measure relative changes in value over time
  • Expressed as a percentage of a base value (usually set to 100)
  • Used to compare economic data (e.g., prices, asset values)

Calculating index numbers

  • Formula: (Value in period / Value in base period) × 100
  • Base period index always equals 100
  • Allows easy comparison across different time periods

Uses of index numbers

  • Track trends (e.g., inflation, stock market performance)
  • Summarize complex data into a single figure
  • Facilitate comparison between different datasets or timeframes
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Next  | 5.2 Index numbers
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Introduction

This chapter introduces index numbers - what they are, how to calculate them, and how to use them to compare values over time.

You’ve probably seen business news report changes in asset values using an index (like a stock market index). Those index-based summaries are exactly the kind of idea you’ll learn to interpret and create here.

Key points

Index numbers: definition and purpose

  • Measure relative changes in value over time
  • Expressed as a percentage of a base value (usually set to 100)
  • Used to compare economic data (e.g., prices, asset values)

Calculating index numbers

  • Formula: (Value in period / Value in base period) × 100
  • Base period index always equals 100
  • Allows easy comparison across different time periods

Uses of index numbers

  • Track trends (e.g., inflation, stock market performance)
  • Summarize complex data into a single figure
  • Facilitate comparison between different datasets or timeframes

More from Macroeconomics – Index numbers

  • Index numbers
  • Relative indices