Index NumbersMCQPYQ Jun 23Question 3888 of 197
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The index number of prices for a country at a given data is 250\displaystyle 250. In comparison to the base period price, the price of all commodities in the country has increased by ______ times.

Options

A1.25\displaystyle 1.25
B1.5\displaystyle 1.5
C2\displaystyle 2
D2.5\displaystyle 2.5
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Correct Answer

Option b1.5\displaystyle 1.5

All Options:

  • A1.25\displaystyle 1.25
  • B1.5\displaystyle 1.5
  • C2\displaystyle 2
  • D2.5\displaystyle 2.5

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Detailed Solution & Explanation

We are given: - Price Index (P01\displaystyle P_{01}) = 250\displaystyle 250 An index of 250 means that the price level in the current period is 2.5\displaystyle 2.5 times the price level in the base period (250%/100%=2.5\displaystyle 250\% / 100\% = 2.5). The **increase** in prices is: Increase=250%100%=150%=1.5 times\text{Increase} = 250\% - 100\% = 150\% = 1.5 \text{ times} Thus, the prices of all commodities have increased by 1.5\displaystyle 1.5 times. Hence, **Option B** 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

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