# Index Numbers Notes, Class 11 Economics | SwaVid Index Numbers, NCERT Class 11 Economics: notes with key ideas, definitions, common mistakes and 3 quick checks with worked answers. Canonical: https://www.swavid.com/cbse/class-11/economics/chapter/index-numbers Source: https://www.swavid.com/cbse/class-11/economics/chapter/index-numbers # Index Numbers ## Definitions, formats and formulas ## Key ideas ## Common mistakes ## Quick checks ## Keep going ## Questions parents ask ## Class 11 Economics on SwaVid ### Meaning of index numbers ### Base period and current period ### Simple aggregative and relative methods ### Weighted price index numbers ### Consumer Price Index and Wholesale Price Index ### Index of industrial production ### Issues in construction of index numbers ### Next chapter ### Related chapter ### Related chapter ### All chapters SwaVid › CBSE › Class 11 › Economics › Index Numbers Notes written by SwaVid from the NCERT textbook. Class 11 Economics, Chapter 7. Key ideas, definitions and common mistakes. CBSE does not print marks for a single chapter. Short answer. This chapter explains the concept, construction, and interpretation of index numbers in statistics. Students learn how to measure relative changes in prices, quantities, and industrial output across time using specific weighted and unweighted formulas. Source: NCERT Statistics for Economics (Reprint 2026-27) , Chapter 7, Index Numbers An index number is a statistical device designed to measure relative changes in a variable or a group of related variables over time or between locations. It expresses the value of a variable in the current period as a percentage of its value in a chosen base period. The base period is the period of reference against which comparisons are made, denoted by the subscript 0. It should be a normal period free from economic crises, wars, or natural calamities. The current period is the period whose values are being compared, denoted by the subscript 1. The simple aggregative price index expresses the sum of current prices as a percentage of the sum of base prices. The simple average of price relatives calculates the price relative for each commodity first, and then takes their arithmetic mean. Weighted index numbers assign weights to reflect the relative importance of different commodities. Laspeyres price index uses base period quantities as weights, while Paasche price index uses current period quantities as weights. Consumer Price Index measures changes in the cost of living for a specific class of consumers over time using retail prices. Wholesale Price Index measures changes in the general price level of goods traded in wholesale markets. The Index of Industrial Production measures changes in the physical volume of production in industrial sectors such as mining, manufacturing, and electricity. It assigns weights based on the contribution of each industry to total net output or value added. Constructing an index number requires defining its specific purpose, choosing an appropriate base year, selecting representative commodities and price quotations, and choosing a suitable system of weights. Try each question first. Then tap it to see the answer. P₀₁ = (∑ p₁ / ∑ p₀) × 100 P₀₁ = (325 / 250) × 100 P₀₁ = 1.3 × 100 = 130 130 P₀₁ = [∑ (p₁ × q₀) / ∑ (p₀ × q₀)] × 100 P₀₁ = (1,200 / 1,000) × 100 P₀₁ = 1.2 × 100 = 120 120 Rate of inflation = [(WPI₁ - WPI₀) / WPI₀] × 100 Rate of inflation = [(126 - 120) / 120] × 100 Rate of inflation = (6 / 120) × 100 = 5% 5% Use of Statistical Tools . Measures of Central Tendency . Presentation of Data . The 13 chapters of Class 11 Economics . CBSE does not give marks to one chapter. It prints marks for units or parts, and the chapter list page shows them all. No. They are written by SwaVid from the NCERT textbook. The CBSE curriculum is the reference for what is assessed. Use of Statistical Tools. SwaVid is an AI tutor for Indian students in Classes 6 to 12. It finds the earlier ideas a child missed, then teaches today’s chapter. Start free to see how it works. - Ch 7 NCERT book - 80 marks, theory paper - 3 quick checks - Mixing up weights in Laspeyres and Paasche formulas . Remember that Laspeyres uses base year quantities q₀ as weights, while Paasche uses current year quantities q₁ as weights. - Dividing current values by base values after taking the sum in simple average of relatives . Calculate the individual relative (p₁ / p₀) × 100 for each commodity first, and then take the average of these ratios. - Forgetting to multiply by 100 in price index formulas . Index numbers are expressed with a base of 100, so always multiply the aggregate or average ratio by 100. ## Key Links - [CBSE](https://www.swavid.com/cbse) - [Class 11](https://www.swavid.com/cbse/class-11) - [Economics](https://www.swavid.com/cbse/class-11/economics/chapters) - [Start free →](https://www.swavid.com/signup) - [All 13 chapters](https://www.swavid.com/cbse/class-11/economics/chapters) - [NCERT Statistics for Economics (Reprint 2026-27)](https://ncert.nic.in/textbook.php) - [Open notes](https://www.swavid.com/cbse/class-11/economics/chapter/use-of-statistical-tools) - [Open notes](https://www.swavid.com/cbse/class-11/economics/chapter/measures-of-central-tendency) - [Open notes](https://www.swavid.com/cbse/class-11/economics/chapter/presentation-of-data) - [Class 11 Economics](https://www.swavid.com/cbse/class-11/economics/chapters) - [Start free →](https://www.swavid.com/signup)