Index NumbersMCQMTP Nov 21Question 3906 of 197
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If the price of a commodity in a place have decreased by $30\%$ over the based period places, then the index number of that place is

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

✅ Option c — $70$

All Options:

  • A$30$
  • B$60$
  • C$70$
  • D$80$

Detailed Solution & Explanation

We are given: - The price of a commodity decreased by $30\%$ over the base period. Since the base period index is always $100$, the new index number is: Index Number=100−30=70Index Number=100−30=70\displaystyle \text{Index Number} = 100 - 30 = 70 *(Note: Although the price decrease is 30, the resulting index number level is 70. Some keys confuse the decrease with the index level, marking Option A. Mathematically, the index number is exactly 70, which is Option C).* Hence, **Option C** 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.

Key Concepts to Understand

Index Number

A statistical device for measuring changes in the magnitude of a group of related variables (like prices or production) over time.

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More Questions from Index Numbers

In price index, when a new commodity is required to be added, which of the following index is used?

Fisher's ideal formula for calculating index number satisfies the ________

Shifted Price Index = Original Price IndexPrice Index of the year on which it has to be shifted×100\displaystyle Original Price IndexPrice Index of the year on which it has to be shifted\displaystyle \frac{\text{Original Price Index}}{\text{Price Index of the year on which it has to be shifted}} ×\displaystyle \times 100

If Laspeyres's Index Number is 250 and Paasche's Index Number is 160, then Fisher's Index number is

If ∑P0q0=240\displaystyle ∑\displaystyle \sum P_0q_0 = 240, ∑P1q0=480\displaystyle ∑\displaystyle \sum P_1q_0 = 480, ∑P0q1=600\displaystyle ∑\displaystyle \sum P_0q_1 = 600 and ∑P1q1=192\displaystyle ∑\displaystyle \sum P_1q_1 = 192, then Laspeyres's Index Number is

If ΣPnqn=249\displaystyle Σ\displaystyle \Sigma P_n q_n = 249, ΣP0q0=150\displaystyle Σ\displaystyle \Sigma P_0 q_0 = 150, ΣPnq0=145\displaystyle Σ\displaystyle \Sigma P_n q_0 = 145 and Paasche's Index Number = 150, then Fisher's Ideal Price Index Number is

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