Index Numbers introduction measures relative changes. Base year = 100 (reference point). Index for other year = (Value_current / Value_base) × 100. Key concepts: simplifies comparison across time periods, shows percentage change. Common traps: forgetting to multiply by 100, inconsistent base year. Exam tips: clearly identify base year, interpret as percentage. Time-saving: recognize index = 100 means no change from base. Types: price index, quantity index, value index. Application examples: cost of living index, stock market indices. Aggregation: simple vs weighted indices for multiple items. Real vs nominal values: adjusted for inflation using index. Understanding indices essential for economic analysis. Practice reading and calculating simple indices first.