The worked question on this page is original educational practice. It is not represented as a question from an official previous-year examination paper.
01 / UNDERSTANDING
Review the question
Create original index paths that rise at a slowing rate, then ask whether prices fell. Include a numerical percentage calculation to connect the conceptual distinction with a checkable result.
02 / UNDERSTANDING
The concept in context
A lower positive inflation rate means prices are increasing more slowly, not necessarily falling. The price level can remain higher than before even when inflation declines. Compare like periods and the same index series, keeping monthly and year-on-year changes separate. Current index values, series definitions and releases should be checked with the official statistical source.
03 / UNDERSTANDING
A worked learning case
Original educational case. In an original index example, the value rises from 100 to 110, a 10% increase, then from 110 to 115.5, a 5% increase. Inflation slows from 10% to 5%, yet the price index continues upward. Saying prices fell in the second interval would confuse a lower growth rate with a lower level.
ORIGINAL EDUCATIONAL PRACTICE
Try it before you check.
Original practice: An index rises from 120 to 126. What is its percentage increase?
Show the answer and reasoning
5%.
The change is 126 − 120 = 6 index points. Divide by the comparison value of 120 and multiply by 100 to obtain 5%. Six index points and six percent are different measures. The result describes the specified interval only; no monthly or annual label should be added unless that interval is supplied.
Two traps to watch for.
- Calling a lower positive inflation rate a fall in prices.
- Treating an index-point change as the same percentage change.
YOUR TOPIC-SPECIFIC LEARNING MAP
Learn from the attempt
Identify index, period and comparison base.
Calculate points and percent separately.
Explain level versus rate in one sentence.
Explain the idea, apply it to a new situation, then check what changed in your reasoning.
BANKERS TUTORIAL · SOURCE NOTES
Keep the source alongside your notes.
Official links provide subject context and authoritative reference material. This guide’s explanation, scenario and question are original Bankers Tutorial learning content.
- www.ibps.in https://www.ibps.in/
- cpi.mospi.gov.in https://cpi.mospi.gov.in/
- mospi.gov.in https://mospi.gov.in/faq
For IBPS & RRB preparation, check the current official notice before relying on changing dates, rules or examination requirements.
