If a price index increases from 100 to 128, the percentage increase in prices is:
Correct answer: D. 28 percent
- A. 18 percent
- B. twenty-eight percent
- C. 128 percent
- D. 28 percent
Explanation
The increase is 128 minus 100, or 28 index points. Since the base is 100, these 28 points represent a 28 percent rise, not a 128 percent rise.
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About Index Numbers
Index numbers measure relative changes in prices, quantities or values over time using a base period. Work includes simple and weighted price indices, aggregate methods, consumer price calculations, percentage change and purchasing power, with attention to choosing a base year and interpreting an index rather than treating it as an absolute amount.
Practise Index Numbers
30 free Index Numbers MCQs from Quantitative Methods, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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