How is CPU processing speed reported in /proc/cpuinfo?

Solution 1:

2.4GHz is what the core is rated for. 1.6GHz is what SpeedStep is currently running it at.

Solution 2:

Your car might have a maximum speed of 240 km/h. It does not mean it would be necessary to drive that fast all the time.

Modern CPUs are also throttling their speed on-demand basis. A typical desktop usage rarely needs maximum speed, so CPU will run on lower speed to save energy and also for lowering the temperature. What you are seeing is normal and expected behaviour.