Question

if the purchasing power of money is 0.75 in the year 2016 with respect to the base year 2015, then what will be the price index number for the year 2016?

Answer 1

Answer:

Actually purchasing power=100/ price index

Explanation:

hence;

price index=100÷0.75

i.e 133.33

This is correct solution

Hope it helps you!

Answer 2

The price index is 133.33

Given,

The purchasing power of money in the year 2016 with respect to the base year 2015 = 0.75

To Find,

The price index number for the year 2016 =?

Solution,

From the formula of the price index, we know that,

Price index = 100 / Purchasing power

Putting the value of purchasing power, we get

Price index = 100 / 0.75

Price index = 10000/75

Price index = 133.33

Hence, the price index number for the year 2016 is 133.33.