Index NumbersMCQMTP Nov 20Question 3899 of 197
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During the certain period the C.L.I. goes up from $110\displaystyle to $200 and the Salary of a worker is also raised from $330\displaystyle to $500, then the change in real terms is

Select Your Answer (Keyboard: A, B, C, D)
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Correct Answer

✅ Option a — Loss by $50$

All Options:

  • ALoss by $50$
  • BLoss by $75$
  • CLoss by $90$
  • DNone of these

Detailed Solution & Explanation

We are given: - Initial Cost of Living Index (CLI0\displaystyle CLI_0) = $110$ - Final Cost of Living Index (CLI1\displaystyle CLI_1) = $200$ - Initial Salary (S0\displaystyle S_0) = $330$ - Final Salary (S1\displaystyle S_1) = $500$ Let's calculate the real wages for both periods: 1. **Real Wage in Initial Period**: RW0=S0CLI0×100=330110×100=300RW_0 = S0CLI0\displaystyle \frac{S_0}{CLI_0} ×\displaystyle \times 100 = 330110\displaystyle \frac{330}{110} ×\displaystyle \times 100 = 300 2. **Real Wage in Final Period**: RW1=S1CLI1×100=500200×100=250RW_1 = S1CLI1\displaystyle \frac{S_1}{CLI_1} ×\displaystyle \times 100 = 500200\displaystyle \frac{500}{200} ×\displaystyle \times 100 = 250 3. **Change in Real Terms**: ΔRW=RW1−RW0=250−300=−50Δ\displaystyle \Delta RW = RW_1 - RW_0 = 250 - 300 = -50 Since the real wage has decreased by $50$, the worker has suffered a **Loss by 50**. Hence, **Option A** is the correct answer.

About This Chapter: Index Numbers

Paper

Paper 3: Quantitative Aptitude

Weightage

4-6 Marks

Key Topics

Construction of Index Numbers, Time Series

This chapter covers Construction of Index Numbers, Time Series and is part of Paper 3: Quantitative Aptitude in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 4-6 Marks weightage. Focus on understanding core concepts rather than memorizing.

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