CA Foundation · Quantitative Aptitude · Index Numbers
A price index series with base 2012 = 100 shows 240 for the year 2017 and 360 for the year 2021. If the base is shifted to 2017 = 100, what is the index number for 2021?
The shifted index for 2021 is 150. Under base shifting, the old index of the target year (360) is divided by the old index of the new base year (240) and multiplied by 100, which gives 150.
- A120
- B66.67
- C150Correct
- D260
Explanation
Base shifting divides each index by the index of the new base year and multiplies by 100. New index for 2021 = 360/240 × 100 = 150. Subtracting the two (360 − 240 = 120) is wrong because index numbers must be compared by ratio, not by difference. Inverting the ratio gives 66.67, which is also wrong.
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