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Index numbers are commonly used in economics for various data such as GDP, house prices, productivity, exchange rate, and inflation. They help simplify and make ugly numbers easier to understand by providing a relative comparison. For example, instead of a long and complex number like 249350.9 for average house prices, you can simply represent it as 100. This makes numbers more visually appealing and easier to interpret, which is why index numbers are widely used in economic analysis.