Q.Which prices are considered in the construction of the cost of living index number?

In the family budget method the weights are the base-year expenditure on each item.

The family budget (weighted average of price relatives) method builds the cost-of-living / consumer price index as $I=\dfrac{\Sigma PW}{\Sigma W}$, where $P=\dfrac{p_1}{p_0}\times100$ is the price relative and $W$ is the value weight. The weight represents how important an item is in a typical family's spending, and this is measured by the amount f …

The cost of living index number (a consumer price index) is built from the retail prices of the basket of goods and services consumed by a defined class of people — option (d).

The cost of living index number, studied in the Gujarat HSC / GSEB Class-12 Statistics Index Number chapter, tracks how the cost of maintaining a fixed standard of living changes over time for a particular group of consumers (e.g. industrial workers).

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The rate of inflation is the percentage change in the price (consumer) index number between two consecutive periods: $\dfrac{P_{\text{current}} - P_{\text{previous}}}{P_{\text{previous}}} \times 100$.

GSEB Class-12 Statistics, Index Number chapter:

Inflation is the rate at which the general price level rises over time, and it is measured from the price index numbers of two consecutive periods.

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The rate of inflation reflects the general rise in the price level of goods, which is measured by the Wholesale Price Index Number (WPI). Option (B).

Inflation is the sustained increase in the general price level of a wide basket of commodities. Among the given choices, the Cost of Living index measures the effect of price changes on a particular class of consumers, the National Income index and the Import–Export index measure other economic aggregates, whereas the **Wh …