State whether true or false: Cost of living index number is used in calculating purchasing power of money.
Q.4 (B) (iii) State whether true or false: Cost of living index number is used in calculating purchasing power of money.
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Answer: True
Purchasing power of money \(=\frac{1}{\text{Cost of living index number}}\) (\(\times100\)), so the cost of living index is used to calculate it (and real wages).
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· 28 Oct 2026
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