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Index numbers are measures of relative changes and can show only a general tendency. In this sense they are techniques for estimating the general trends in prices, production and other economic variables. They are used to feel the pulse of the economy and they indicate the inflationary and deflationary tendencies.

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Cost of living index numbers provide a useful measure for comparing the relative cost of living between different regions or over time. They help individuals and businesses make informed decisions regarding wages, pricing, and budgeting. Additionally, these indices can guide policymakers in assessing economic conditions and addressing inflationary impacts on households. Overall, they serve as a valuable tool for economic analysis and planning.


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