What is a consumer price index number? Write any four of its uses.

1.	What is a consumer price index number? Write any four of its uses.
Answer» Cost of living index number/consumer price index number is the index number of the cost met by a specified class of consumers in buying a basket of goods and services. Uses: • It is commonly used in fixation of salary, dearness allowances to the employees. • They are used by govt, in formulation of price policy, wage policy and general economic policies. • They are used in evaluation of purchasing power of money and deflating the money. • They are used for comparing cost of living of different classes of people.

Answer»

Cost of living index number/consumer price index number is the index number of the cost met by a specified class of consumers in buying a basket of goods and services.

Uses:

• It is commonly used in fixation of salary, dearness allowances to the employees.

• They are used by govt, in formulation of price policy, wage policy and general economic policies.

• They are used in evaluation of purchasing power of money and deflating the money.

• They are used for comparing cost of living of different classes of people.

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