Measure of change in a set of prices, consisting of a series of numbers arranged so that a comparison of the values for any two periods or places will show the change in prices between periods or the difference in prices between places. Price indexes were first developed to measure changes in the cost of living in order to determine the wage increases necessary to maintain a constant standard of living. There are two basic types. Laspeyres-type indexes define a market basket of goods in a base period, then use the prices for those goods to examine change over space and time. In its simplest form, this is simply the ratio of what those goods cost today to what they cost in the base period. The two most familiar indexes of this type are the consumer price index (CPI) and the producer price index (PPI). The CPI measures changes in retail prices in such component parts as food, clothing, and shelter. The PPI (formerly called the wholesale price index) measures changes in the prices charged by manufacturers and wholesalers. Paasche-type indexes define a market basket of goods in the current period, then use the prices of those goods from past periods. The most familiar index of this type is the GDP deflator, used in the U.S. in the national income accounting to differentiate amounts in constant dollars from those in current dollars.
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Comparison of price levels over time. In fiscal policy, indexation is used as a means of offsetting the effect of inflation or deflation on social security payments and taxes by measuring the real value of money from a fixed point of reference, usually a price index. Without indexing, recipients of social security benefits, for example, would suffer during times of inflation if their benefits remained at a fixed rate. Indexation is used in some countries to offset “bracket creep,” which occurs in any progressive tax system when inflation pushes taxpayers into higher tax brackets. Indexation may also refer to the linking of wage rates and financial instruments to a price index.
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Measure of living costs based on changes in retail prices. Consumer price indexes are widely used to measure changes in the cost of maintaining a given standard of living. The goods and services commonly purchased by the population covered are priced periodically, and their prices are combined in proportion to their relative importance. This set of prices is compared with the initial set of prices collected in the base year to determine the percentage increase or decrease. The population covered may be restricted to wage and salary earners or to city dwellers, and special indexes may be used for special population groups (e.g., retirees). Such indexes do not take into account shifts over time in what the population buys; when modified to take subjective preferences into account, they are called constant-utility indexes. Consumer price indexes are available for more than 100 countries.
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In igneous petrology, the sum of the volume percentages of the coloured, or dark, minerals in the rock. The most common light-coloured minerals are feldspars, feldspathoids, and silica or quartz; abundant dark-coloured minerals include olivine, pyroxene, amphibole, biotite, garnet, tourmaline, iron oxides, sulfides, and metals.
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An index is a system used to make finding information easier.
Index may also refer to:
In computers and information retrieval: