PRC-2 · Chapter 9 · Question 52 of 60
In economic statistics, the 'purchasing power of money' is mathematically defined strictly as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The exact reciprocal of the Consumer Price Index (1 / CPI).
Explanation
As general prices (CPI) rise, the actual value or purchasing power of a single unit of currency inversely falls. It is therefore mathematically defined as the exact reciprocal of the price index.
More Indices MCQs
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