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The price level of a country in a certain year has increased 25% over the base period.The index number is
- a)25
- b)125
- c)225
- d)2500
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
The price level of a country in a certain year has increased 25% over ...
2. 125
Explanation:
An index number is a measure of how much a quantity, such as a price level, has changed relative to a base period. When the price level increases by 25% over the base period, the index number is calculated as follows:
Index Number=100+Percentage Increase
In this case:
Index Number=100+25=125
So, the index number is 125.
Most Upvoted Answer
The price level of a country in a certain year has increased 25% over ...
Explanation:
Price level refers to the average level of prices of goods and services in an economy. An index number is a measure of the relative change in a variable with respect to a base period. To calculate the index number, we take the value of the variable in the current period and divide it by the value of the variable in the base period, and then multiply the result by 100.
In this question, the price level of a country in a certain year has increased 25% over the base period. To calculate the index number, we need to divide the price level in the current year by the price level in the base period and then multiply by 100.
Let the price level in the base period be 100. Then, the price level in the current year is 125 (25% increase over the base period). Therefore, the index number is:
Index number = (Price level in current year / Price level in base period) x 100
Index number = (125/100) x 100
Index number = 125
Hence, the correct answer is option B (125).
Price level refers to the average level of prices of goods and services in an economy. An index number is a measure of the relative change in a variable with respect to a base period. To calculate the index number, we take the value of the variable in the current period and divide it by the value of the variable in the base period, and then multiply the result by 100.
In this question, the price level of a country in a certain year has increased 25% over the base period. To calculate the index number, we need to divide the price level in the current year by the price level in the base period and then multiply by 100.
Let the price level in the base period be 100. Then, the price level in the current year is 125 (25% increase over the base period). Therefore, the index number is:
Index number = (Price level in current year / Price level in base period) x 100
Index number = (125/100) x 100
Index number = 125
Hence, the correct answer is option B (125).
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Community Answer
The price level of a country in a certain year has increased 25% over ...
In Base year it is always considered as 100 and price level has increased 25% to base yesr i.e. 100 so 100+25%(of 100) =125
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The price level of a country in a certain year has increased 25% over the base period.The index number isa)25b)125c)225d)2500Correct answer is option 'B'. Can you explain this answer?
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