What is the difference between a price index and a quantity index?
Price index numbers measure and permit comparison of the prices of certain goods. They are the most widely used form of index numbers.
On the other hand, quantity index numbers measure the changes in the physical volume of production, construction, or employment. A production index is a specific type of quantity index that serves as an important indicator of the level of output in the economy.
Thus, the primary difference lies in their measurement focus: price indices track monetary changes in goods, whereas quantity indices track changes in physical volume.
Explanation
The answer is derived directly from the second paragraph of the provided context, which explicitly defines both types of index numbers. It highlights that price indices relate to the comparison of prices, while quantity indices relate to the physical volume of production, construction, or employment. The distinction between 'widely used' price indices and 'important indicator' quantity indices is also drawn from the text.