Index numbers measure changes over time (price, quantity, value). Base period = 100. Index = (Current value / Base value) × 100. Laspeyres price index: IL = Σ(p₁q₀)/Σ(p₀q₀) × 100 (fixed quantities). Paasche price index: IP = Σ(p₁q₁)/Σ(p₀q₁) × 100 (current quantities). Example: Basket of goods. Base year: Bread 20, Milk 50. Current: Bread 25, Milk 55. Simple index: Bread = (25/20)×100 = 125; Milk = (55/50)×100 = 110. Laspeyres (2 units bread, 1 unit milk): IL = (25×2 + 55×1)/(20×2 + 50×1)×100 = 155/90×100 ≈ 172. Applications: CPI (consumer prices), commodity indices, stock indices. Exam tip: Distinguish Laspeyres vs Paasche. Understand base period role. Practice: Index calculations.