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Index numbers are statistical devices that measure
AAbsolute changes in prices
BRelative changes in a variable over time
CDifferences between two products
DInflation only
Answer & Solution
Correct answer: B. Relative changes in a variable over time
1. An index number compares a variable at different times relative to a base period.
2. The base period is usually assigned the value 100.
3. Index numbers track relative change, not absolute differences.
4. Hence (B) describes them.
_Source: Maharashtra Balbharati Std XII Mathematics & Statistics (Commerce), Ch 3 "Index Numbers", §3.1 ¶§3.1_
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