If the Cost of Living Index rises by 10%, a wage earner's real income remains unchanged only if nominal wages increase by: MCQ with Answer and Explanation

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If the Cost of Living Index rises by 10%, a wage earner's real income remains unchanged only if nominal wages increase by:

A. 20%

B. 5%

C. 15%

D. 10%

Answer: Option D

Solution (By JKExamLibrary)

Real income = Nominal income / Price index. To keep real income constant when prices rise 10% (index ×1.10), nominal income must also rise 10% (×1.10), so the ratio remains unchanged.

This question belongs to: Accountancy and Statistics Statistics

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Practice More Statistics Questions

Question #1 Report Error

A box contains 4 white and 6 black balls. A ball is drawn and not replaced. Then another ball is drawn. The probability that both are white is:

A. 2/15

B. 12/90

C. 6/90

D. 1/6

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Correct Answer: Option A

Explanation:
(4/10)×(3/9)=12/90=2/15.

This question belongs to: Accountancy and Statistics Statistics

Question #2 Report Error

If the variance of a dataset is 16, the standard deviation is:

A. 256

B. 2

C. 8

D. 4

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Correct Answer: Option D

Explanation:
SD = √variance = 4.

This question belongs to: Accountancy and Statistics Statistics

Question #3 Report Error

Cost of Living Index is primarily used for:

A. Measuring industrial production

B. Adjusting dearness allowance

C. Calculating trade balance

D. Calculating GDP

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Correct Answer: Option B

Explanation:
It is used to adjust salaries and wages to maintain purchasing power.

This question belongs to: Accountancy and Statistics Statistics

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