Economic index facts for kids

An economic index is a number that is calculated from different economic factors, like prices or income. These numbers are calculated to be able to compare different economies in different countries. An example for such an index would be the Gross Domestic Product (or GDP).

Usually, the base is given a value of 100 and all later data is expressed in relation to this base. For example, the consumer price index (CPI) of a year might stand at 95 (a fall of 5 percent in the prices) or 105 (an increase of 5 percent in the prices).

Indexes (indices) also measure up and down movement of industrial production, and of the market prices of bonds, commodities, shares, etc.