Question

The total expenditure of a family on certain consumable items was Rs 10,000 in the year
1995. It was Rs 14.250 in the year 2001. Find the cost of living index number for the year
2001, taking 1995 as the base year.​

Answer 1

Under this method, we take the quantities of consumption of various commodities by a particular section of the people in the base year as weights. We then calculate the total expenditure of each commodity for each year.

For this, we need to multiply the price of the current year with the quantity or weight of the base year and add these products. Similarly, we have to calculate the total expenditure for the base year of each commodity.

Thus, in order to calculate the index numbers, we have to divide the total expenditure of the current year by the total expenditure of the base year and multiply the resulting figure by 100.

This method is somewhat like the Laspeyres’ Method.

Consumer Price Index = \(\frac{∑p1q0}{∑p0q0}\) x 100

Here,

Answer 2

Answer:

the above answer is right answer