Question

Index number in the base period is always taken as
$\begin{align}
  & a)200 \\
 & b)50 \\
 & c)1 \\
 & d)100 \\
\end{align}$

Answer 1

Hint: To calculate and analyze statistical data we say that always take the reference year as the base year. The index value associated with the base year is always fixed and equal to 100.
Now first let us understand the concept of base year and index number.
Base year is very useful when we want to compare business activities or any kind of economic activities. For example if we want to check the growth of a company, or the economic growth etc.
Now the base year or the base period is the year which is taken as a reference point to calculate the financial index or economical index. So basically any year to which we compare to is called base year.

Complete step by step answer:
Now let us understand what an index number is.
Now index number is a statistical number which is widely used to measure change in the data. It helps us understand the current trend. Now Base year is the starting point and is always referred with an index number of 100. Now Further when we compare the base number and the current year if the index number is greater than 100 then we can say it has increased and similarly if the index number is less than 100 then we say it has decreased.

So, the correct answer is “Option d”.

Note: Now note that since the index number of base year is always 100 then we can easily find the percentage increase/decrease for the current year or the year that we are comparing. Let us say 2010 is the base year and in 2015 the index number is 110. Hence we can say there is a 10 percent increase in the year 2015 when compared with 2010.