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If the price index for the year ,say 2018 be 125 and the price index for the year ,say 2010 be 95, then the purchasing power of money (rupees )of 2010 will be in 2008 is?
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If the price index for the year ,say 2018 be 125 and the price index f...
Explanation:
The purchasing power of money refers to the amount of goods and services that can be purchased with a certain amount of money. The price index is a measure of the average price of goods and services in an economy, relative to a base year.
Calculation:
To calculate the purchasing power of money in 2010 in 2018, we need to use the formula:
Purchasing Power of Money in 2010 = (Price Index in 2010 / Price Index in 2018) * 100
Substituting the values, we get:
Purchasing Power of Money in 2010 = (95 / 125) * 100 = 76
This means that the purchasing power of money in 2010 is only 76% of what it was in 2018. In other words, the same amount of money in 2010 would only be able to purchase 76% of the goods and services it could buy in 2018.
Conclusion:
In economics, it is important to understand the concept of inflation and its impact on the purchasing power of money. Inflation reduces the value of money over time, which means that the same amount of money can buy less goods and services in the future. By using the price index, we can measure the extent of inflation and calculate the purchasing power of money in different periods.
The purchasing power of money refers to the amount of goods and services that can be purchased with a certain amount of money. The price index is a measure of the average price of goods and services in an economy, relative to a base year.
Calculation:
To calculate the purchasing power of money in 2010 in 2018, we need to use the formula:
Purchasing Power of Money in 2010 = (Price Index in 2010 / Price Index in 2018) * 100
Substituting the values, we get:
Purchasing Power of Money in 2010 = (95 / 125) * 100 = 76
This means that the purchasing power of money in 2010 is only 76% of what it was in 2018. In other words, the same amount of money in 2010 would only be able to purchase 76% of the goods and services it could buy in 2018.
Conclusion:
In economics, it is important to understand the concept of inflation and its impact on the purchasing power of money. Inflation reduces the value of money over time, which means that the same amount of money can buy less goods and services in the future. By using the price index, we can measure the extent of inflation and calculate the purchasing power of money in different periods.
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If the price index for the year ,say 2018 be 125 and the price index for the year ,say 2010 be 95, then the purchasing power of money (rupees )of 2010 will be in 2008 is?
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If the price index for the year ,say 2018 be 125 and the price index for the year ,say 2010 be 95, then the purchasing power of money (rupees )of 2010 will be in 2008 is? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If the price index for the year ,say 2018 be 125 and the price index for the year ,say 2010 be 95, then the purchasing power of money (rupees )of 2010 will be in 2008 is? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the price index for the year ,say 2018 be 125 and the price index for the year ,say 2010 be 95, then the purchasing power of money (rupees )of 2010 will be in 2008 is?.
If the price index for the year ,say 2018 be 125 and the price index for the year ,say 2010 be 95, then the purchasing power of money (rupees )of 2010 will be in 2008 is? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If the price index for the year ,say 2018 be 125 and the price index for the year ,say 2010 be 95, then the purchasing power of money (rupees )of 2010 will be in 2008 is? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the price index for the year ,say 2018 be 125 and the price index for the year ,say 2010 be 95, then the purchasing power of money (rupees )of 2010 will be in 2008 is?.
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