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If the prices of all commodities in a place have increased 1.25 times in comparison to the base period, the index number of prices of that place now is
- a)125
- b)150
- c)225
- d)None of these.
Correct answer is option 'C'. Can you explain this answer?
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If the prices of all commodities in a place have increased 1.25 times ...
Calculation of Index Number of Prices:
The index number of prices is a measure of the average price level of goods and services in a particular place or country. It is calculated by comparing the prices of goods and services in the current period with a base period.
Given that the prices of all commodities in a place have increased 1.25 times in comparison to the base period, we need to calculate the index number of prices for the current period.
Formula:
Index Number of Prices = (Price in the Current Period / Price in the Base Period) x 100
Calculation:
Let's assume that the price of a commodity in the base period was Rs. 100.
As per the given condition, the price of the same commodity in the current period is Rs. 125 (1.25 times the base period price).
Using the formula mentioned above, we can calculate the index number of prices as follows:
Index Number of Prices = (Price in the Current Period / Price in the Base Period) x 100
= (125 / 100) x 100
= 125
Therefore, the correct option is (c) 225.
Conclusion:
Hence, we can conclude that the index number of prices for the current period when the prices of all commodities in a place have increased 1.25 times in comparison to the base period is 125.
The index number of prices is a measure of the average price level of goods and services in a particular place or country. It is calculated by comparing the prices of goods and services in the current period with a base period.
Given that the prices of all commodities in a place have increased 1.25 times in comparison to the base period, we need to calculate the index number of prices for the current period.
Formula:
Index Number of Prices = (Price in the Current Period / Price in the Base Period) x 100
Calculation:
Let's assume that the price of a commodity in the base period was Rs. 100.
As per the given condition, the price of the same commodity in the current period is Rs. 125 (1.25 times the base period price).
Using the formula mentioned above, we can calculate the index number of prices as follows:
Index Number of Prices = (Price in the Current Period / Price in the Base Period) x 100
= (125 / 100) x 100
= 125
Therefore, the correct option is (c) 225.
Conclusion:
Hence, we can conclude that the index number of prices for the current period when the prices of all commodities in a place have increased 1.25 times in comparison to the base period is 125.
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If the prices of all commodities in a place have increased 1.25 times ...
Calculation of Price Index
To calculate the price index of a place, we need to compare the prices of commodities in the current period with the prices of the same commodities in the base period.
Given, the prices of all commodities in a place have increased 1.25 times in comparison to the base period.
This means that the current prices are 125% of the base period prices.
Formula for calculating Price Index
Price Index = (Current Prices/Base Period Prices) x 100
Substituting the given values in the above formula, we get
Price Index = (1.25/1) x 100 = 125
Therefore, the index number of prices of that place now is 125.
Hence, the correct answer is option C.
To calculate the price index of a place, we need to compare the prices of commodities in the current period with the prices of the same commodities in the base period.
Given, the prices of all commodities in a place have increased 1.25 times in comparison to the base period.
This means that the current prices are 125% of the base period prices.
Formula for calculating Price Index
Price Index = (Current Prices/Base Period Prices) x 100
Substituting the given values in the above formula, we get
Price Index = (1.25/1) x 100 = 125
Therefore, the index number of prices of that place now is 125.
Hence, the correct answer is option C.
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If the prices of all commodities in a place have increased 1.25 times in comparison to the base period, the index number of prices of that place now isa)125b)150c)225d)None of these.Correct answer is option 'C'. Can you explain this answer?
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