CA Foundation · Quantitative Aptitude · Index Numbers
A price index series with base 2014 = 100 shows 125 for 2016, 200 for 2018 and 250 for 2020. If the base is shifted to 2018 = 100, the index for 2016 will be:
The 2016 index on the new base 2018 = 100 is 62.5. Divide the old 2016 value of 125 by the old 2018 value of 200 and multiply by 100. Inverting the ratio or subtracting would give wrong figures like 160 or 75.
- A62.5Correct
- B160
- C75
- D125
Explanation
New index = old index / old index of the new base year × 100 = 125/200 × 100 = 62.5. The value 160 comes from inverting the ratio (200/125). The value 75 comes from subtracting the indices (200 − 125), which is wrong. The value 125 is the new 2020 index (250/200 × 100), not 2016.
Did you get it right without looking?
One question tells you little. A timed set on Index Numbers shows your real accuracy, how long you take and where you lose marks.
More Index Numbers questions
- Which one of the following statements about the Laspeyres price index is correct?
- For three commodities, base-year price p0, current price p1 and base quantity q0 are: A: p0=10, p1=12, q0=50; B: p0=20, p1=30, q0=10; C: p0=…
- For a group of items, Σp0q0 = 200, Σp1q0 = 260, Σp0q1 = 250 and Σp1q1 = 340. What is the Marshall-Edgeworth price index number?
- A deflated series is built by dividing nominal values by a price index. A firm's sales were ₹80 lakh in 2019 (base year, index 100) and ₹132…
- Given Σp0q0 = 200, Σp1q0 = 260, Σp0q1 = 250 and Σp1q1 = 300, which statement is correct?
- Which of the following is a recognised limitation of index numbers?