The average consumer divides his expenditure between food, clothing, accommodation and transport in the ratio 2 :1: 4 :3.
During the course of a year, the price of food falls by 2%, the price of clothing increases by 4%, the price of accommodation increases by 10% and the price of transport remains constant.
Assuming that the weights of a price index reflect the expenditure of the average consumer, what is the increase in the index over the year?
1 )
2.5%
4%
3 )
10%
4 )
12%
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