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In the face of the economic, political, and social problems resulting from world-wide inflation, theories of the price index have gained new attention. This newfound interest in price indices stems from the fact that all such indices are designed to serve as yardsticks for measuring the price behavior of goods and services. That is, all price indices relate to the concept of the ‘purchasing power of money’. If prices increase, then the value of the unit of money declines, i.e., the purchasing power of money shrinks. If the prices of certain goods and services fall, however, the purchasing power of money increases in relation to these commodities.
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