Index - used to make comparisons over time and space. For example, price indices measure the development in the general price level over time. In order to be able to show the general development, the indices are calculated as a weighted average of the price changes for various goods and services. Purchasing power indices, such as the PPP, measure differences in various countries’ price levels at a specific point in time.

The comparison basis is often given a base value equal to 100. As an example, price indices aimed at measuring developments over time have a value that equals 100 i na specific year, whereby the value of the index in any given period expresses the price change in relation to this year. Price developments between two random years can also be calculated, by comparing the values of the index in these two periods. Purchasing power indices, which measure geographic price differences, will have a country or a geographic area as a basis, with a value equal to 100. Acountry’s index value is therefore an expression of the country’s price level compared with the base country.