NCERT Class 11 Economics Statistics for Economics: Chapter 7 — INTRODUCTION
This chapter introduces the concept of index numbers in Statistics for Economics, Class 11. It explains how summary measures can be obtained from a mass of data to understand changes in a group of related variables. The chapter highlights the importance of index numbers in analyzing real-life situations like changes in prices, cost of living, industrial output, and stock market trends (e.g., Sensex). It defines an index number as a statistical device to measure changes in the magnitude of related variables, often expressed as a percentage relative to a base period. The text differentiates between price index numbers and quantity index numbers, emphasizing their role in economic analysis and decision-making for students following the CBSE curriculum.
Quick info
| Board | CBSE / NCERT |
|---|---|
| Class | Class 11 |
| Subject | Economics |
| Book | Statistics for Economics |
| Chapter | Chapter 7 — INTRODUCTION |
| Language | English |
| PDF type | NCERT Textbook |
| Session | CBSE 2026 |
| Reading time | 4 minutes |
| Word count | 618 |
Learning outcomes
- Understand the meaning and purpose of index numbers.
- Become familiar with widely used index numbers like Sensex.
- Appreciate the role of index numbers in analyzing economic data.
- Recognize the limitations of index numbers.
Vocabulary
| Word | Meaning |
|---|---|
| Index number | A statistical device for measuring changes in the magnitude of a group of related variables. |
| Base period | The period with which comparison is made, assigned an index number of 100. |
| Price index numbers | Measure and permit comparison of the prices of certain goods. |
| Quantity index numbers | Measure the changes in the physical volume of production, construction, or employment. |
| Inflation rate | The rate at which the general level of prices for goods and services is rising. |
| Sensex | A stock market index representing the performance of 30 large, well-established companies listed on the Bombay Stock Exchange. |
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Practice questions
- What is an index number? Answer: An index number is a statistical device used to measure changes in the magnitude of a group of related variables over different periods or situations.
- What is the base period in index numbers? Answer: The base period is the period against which comparisons are made, and its index number is conventionally set at 100.
- Give an example of a price index number. Answer: The Consumer Price Index (CPI) is an example of a price index number.
- What do quantity index numbers measure? Answer: Quantity index numbers measure changes in the physical volume of production, construction, or employment.
Frequently asked questions
What is the main purpose of an index number?
The main purpose of an index number is to measure and summarize changes in a group of related variables over time or across different situations.
Why is the base period given an index number of 100?
The base period is given an index number of 100 to serve as a reference point for comparison, making it easy to understand the percentage change in subsequent periods.
What is the difference between price and quantity index numbers?
Price index numbers measure changes in the price level of a basket of goods, while quantity index numbers measure changes in the physical volume of production or activity.
How does an index number help in understanding inflation?
Index numbers, like the Consumer Price Index (CPI), are used to measure the rate of inflation by tracking the average change in prices of a basket of goods and services over time.
What does it mean when the Sensex crosses a certain point?
When the Sensex crosses a certain point, it indicates a general trend in the stock market, reflecting the combined performance of the companies included in the index.
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Important topics
Topics covered
NCERT Class 11 Economics — Statistics for Economics — Chapter 7 — INTRODUCTION. Verified by NCERT Help Editorial Team. Reviewed on 29 Jul 2026. Last updated 10 Aug 2026.