The Power of Index Numbers in Economics

Economists have a secret weapon that makes comparing numbers ridiculously easy,

and it's called index numbers. Here's how it works: take any starting year,

call it 100, and watch everything else fall into place. If housing prices jump to 167 in ten

years, you instantly know they've grown 67 percent. No complicated math

needed. The genius part is you can shift the base year whenever you want.

Say prices went from index 120 to 135, that's actually a 12.5 percent increase,

not 15. This simple trick turns messy economic data into crystal clear trends.

Once you see it, you can't unsee how powerful this tool really is for understanding money.