Prices and Cost of Living — Flashcards

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A family budget is the balancing of expenditure to income. It involves planning how to spend money on household requirements with the available income. Every family makes a budget - either written or …

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When prices increase, families with fixed incomes (like pensioners, daily wage earners, small vendors) are badly affected because their income doesn't change with inflation. They are forced to reduce …

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The actual number of goods and services that money can buy. During inflation, the purchasing power of money falls because you can buy fewer items with the same amount of money due to increased prices.

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Inflation is the continuous rise in prices of goods and services over a period of time. It means the general increase in the price level in the economy, which reduces the purchasing power of money and…

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Standard of living refers to the quantity of material goods and services that ensures a comfortable life. It varies from family to family, profession to profession, and country to country. For example…

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1. Government employees who get Dearness Allowance (DA) - their salary increases with inflation 2. Business people who increase prices of their goods 3. Service providers (doctors, lawyers) who increa…

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A price index number is a statistical device used to measure changes in prices over time. The average price of selected goods in the base year is given the value 100. If prices rise by 25%, the index …

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WPI (Wholesale Price Index): Includes all goods (capital and consumer) at wholesale rates, used to measure general inflation. CPI (Consumer Price Index): Measures changes in prices of selected consum…