PRELIMINARY ADJUSTMENTS

1) Calendar Variations: As we are aware, all the calendar months do not have the same number of days.  For instance, all production in the month of February may be less than other months because of fewer days and if we take the holidays into account the variation is greater.  Therefore, adjustments for calendar variations have to be made. 




2) Price Changes: As price level changes are inevitable, it is necessary to convert monetary values into real values after taking into consideration the price indices.  In fact this is process of deflating which will be discussed in Unit 17 (Index Numbers) of this course. 

3) Population changes: Population grown constantly.  This also calls for adjustment in the data for the population changes.  In such cases, if necessary, per capita values may be computed (dividing original figures by the total population).  

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