CA Foundation · Quantitative Aptitude · Index Numbers
The wholesale price index (base 2016 = 100) is 160 in 2021 and 200 in 2024. Mr. Iyer's money wage was ₹32,000 per month in 2021 and ₹36,000 in 2024. By how much did his real wage at 2016 prices change from 2021 to 2024?
His real wage fell by ₹2,000. Real wage in 2021 is 32,000 divided by 1.6, which is ₹20,000, and in 2024 is 36,000 divided by 2.0, which is ₹18,000. The money wage rose, but prices rose faster, so purchasing power declined.
- AFell by ₹2,000Correct
- BRose by ₹4,000
- CFell by ₹4,000
- DRemained unchanged
Explanation
Real wage 2021 = 32,000 / 1.60 = ₹20,000. Real wage 2024 = 36,000 / 2.00 = ₹18,000. Change = 18,000 − 20,000 = −₹2,000. The rise of ₹4,000 is only the money wage change, ignoring price changes.
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