CA Foundation · Quantitative Aptitude · Index Numbers
The wholesale price index of a country (base 2011 = 100) was 250 in 2023. Which interpretation is correct?
Prices in 2023 were 150% higher than in 2011. An index of 250 on base 100 means current prices are 250% of base-year prices, so the increase is 250 minus 100, which is 150 per cent.
- APrices in 2023 were 250% lower than in 2011
- BPrices in 2023 were 150% higher than in 2011Correct
- CPrices in 2023 were 2.5% higher than in 2011
- DPrices in 2011 were 250% of the prices in 2023
Explanation
An index of 250 against base 100 means prices are 250% of base-year prices, so the rise is 250 - 100 = 150%. Reading it as 2.5% or as a fall confuses the index level with the change. Only the second option is right.
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