1998 General Studies, all questions
UPSC Prelims 1998 · General Studies
Question 146: Economy and Social Development
The current price index (base 1960) is nearly 330. This means that
aall items cost 3.3 times more than what they did in 1960
bthe prices of certain selected items have gone up to 3.3 times
cweighted mean of prices of certain items has increased 3.3 times
dgold price has gone up 3.3 times
AnswerThe answer is (c).
A price index with base 1960 = 100 that stands at about 330 says that prices, on a weighted average of the items in its basket, are about 3.3 times their 1960 level. It is a weighted mean, because each item is weighted by its importance in household spending. It does not say that all items rose equally, nor that a few chosen items or gold did so.
Why each option is right or wrong
- (a) Not all items rose equally; the index is an average.
- (b) The index covers a basket of items, but it is a weighted mean, not selected items.
- (c) Right: the weighted mean of prices has risen 3.3 times.
- (d) Gold prices are not what the general index measures.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 1998, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.