Statistics: Index Numbers · Class 11 · CBSE · Commerce Economics
A price index number is 125 when the base-year index is 100. This means that, on average, the prices in the current year are:
Practice question from Statistics: Index Numbers (Class 11 · CBSE · Commerce Economics), with the correct answer and a step-by-step solution.
easy · MCQ · Q-845CEF
A price index number is 125 when the base-year index is 100. This means that, on average, the prices in the current year are:
- A.25% lower than in the base year
- B.25% higher than in the base yearCorrect answer
- C.125% higher than in the base year
- D.Equal to the prices in the base year
Solution
An index of 125 means prices are 125% of their base-year level. Therefore, prices have increased by over the base year.
More from Statistics: Index Numbers
- The prices of commodities A and B were ₹10 and ₹20 respectively in the base year, and ₹15 and ₹30 respectively in the current year. What is…
- Why should the base year selected for constructing an index number be a normal year? State one additional desirable feature of a base year.
- The price relatives of three commodities are 120, 90 and 150. If all three commodities are given equal importance, what is the simple avera…
- A consumer price index is calculated using the family budget method. The price relatives of food, clothing and housing are 150, 120 and 100…
Practise more Economics
Sign up free for adaptive practice on this chapter, with instant feedback and hints on every question.
Start practising freeFree to start · No credit card needed