economic data

• • One problem in using money as a measure is that inflation erodes the purchasing power of money 
• UK government statistics expressed in real terms are adjusted to prices three or four years previously
• • It is often more important in economics to compare values than to know the absolute values
• • Many series of statistics are averages. The retail prices index is calculated by working out what it would cost to buy a particular cross-section or ‘basket’ of goods 
• • Many series are converted into index number form. One time period is chosen as the base period and the rest of the statistics in the series are compared to the value in that base period. 
• The value in the base period is usually 100
• • Base period - the period, with which all other values in a series are compared
• Index number - an indicator showing the relative value of one number to another from a base of 100. It is often used to present an average of a number of statistics
• Nominal  values - values unadjusted for the effects of inflation
• • Real values - values adjusted for inflation