What you'll learn
How to analyse data collected over time and compare values using index numbers.
Time series
- A time series plots a variable against time.
- The trend is the general long-term direction.
- Seasonal variation: regular ups and downs within each year.
- Moving averages smooth the data to reveal the trend (e.g. a 4-point moving average for quarterly data).
Index numbers
- An index number compares a value with a base value: (value ÷ base value) × 100.
- Examples include the Retail Price Index (RPI) measuring inflation.
Exam tips
- Plot moving averages at the centre of the values used.
- Interpret an index of, say, 108 as an 8% increase on the base.
Common mistakes
- Plotting a moving average at the wrong point.
- Confusing the trend with seasonal variation.