Index number are constructed with certain specific objectives. So, their use is limited. In the context of this statement, discuss any four limitations.

Asked by Last Modified  

Follow 1
Answer

Please enter your answer

Maths and Science Professional Trainer with14 Years of experience in Teaching

The limitations of index number are as follows(i) Limited Applicability Index number are generally constructed for some specific purpose. Ifwe want to use these for some other purpose, the results may not be true. There are no all purpose index numbers. .(ii) International Comparison is not Possible...
read more
The limitations of index number are as follows(i) Limited Applicability Index number are generally constructed for some specific purpose. Ifwe want to use these for some other purpose, the results may not be true. There are no all purpose index numbers. .(ii) International Comparison is not Possible Due to difference in the unit of currency and also difference in the composition of production and consumption across the different countries, index number fail to facilitate international comparison.(iii) Limited Coverage Index number are usually based on sample items. It is not practically possible to include all the commodities into the construction of index numbers. If the selected items are not able to represent the entire universe, then index numbers will not be true.(iv) Difficulties in the Construction of Index Number The construction of index number involves several problems such as selection of base year, selection of commodities, selection of average, selection of source of data, etc. read less
Comments

Related Questions

What if I change my coaching institute for my class 12 JEE preparation (I'm now in 11th)?
If you think the current institution is not good enough to meet your needs, I think it's better to change!
Latha
0 0
5
Does zero correlation mean independence?
It means zero linear relationship.
Jareena
0 0
6
How can I prepare for physical chemistry of class 12 without any coaching?
Physical chemistry, like any other stream of study, requires intricate interlinked study for proper understanding.For example,the concept of vapour pressure in the " solutions" chapter can be well fathomed...
Prabhu
0 0
6
Is coaching necessary for the CBSE class 12?
Actually for disciplined study you need proper guidance to carry forward your syllabus easily without any hurdles that may be when someone is sharing his or her knowledge with proper guidance and all...
Sriomprakash
0 0
5

Now ask question in any of the 1000+ Categories, and get Answers from Tutors and Trainers on UrbanPro.com

Ask a Question

Related Lessons

What is the difference between GDP and GNP?
GDP is Gross Domestic Product. It is the total value of goods and services produced within the boundaries of a nation in a given time period. E.g. 1 year The value of goods and services produced by both...
M

Maroof A.

0 0
0




Banking
Functions of RBI: 1. Authority to issue currency: It has the sole authority to issue notes and coins in India except for one rupee note, and coins are issued by the ministry of finance. 2. Banker's...

Recommended Articles

Appearing for exams could be stressful for students. Even though they might have prepared well, they could suffer from anxiety, tension etc. These are not good for their health and mind. However, following a few exam preparation tips can save them from all these and help them to score good marks. Let’s find out all...

Read full article >

With the mushrooming of international and private schools, it may seem that the education system of India is healthy. In reality, only 29% of children are sent to the private schools, while the remaining head for government or state funded education. So, to check the reality of Indian education system it is better to look...

Read full article >

With the current trend of the world going digital, electronic renaissance is a new movement that is welcomed by the new generation as it helps makes the lives of millions of people easier and convenient. Along with this rapidly changing movement and gaining popularity of Internet, e-Learning is a new tool that emerging...

Read full article >

Once over with the tenth board exams, a heavy percentage of students remain confused between the three academic streams they have to choose from - science, arts or commerce. Some are confident enough to take a call on this much in advance. But there is no worry if as a student you take time to make choice between - science,...

Read full article >

Looking for Class 11 Tuition ?

Learn from the Best Tutors on UrbanPro

Are you a Tutor or Training Institute?

Join UrbanPro Today to find students near you