Question

How the consumer price index (CPI) is constructed and why it is an imperfect measurement of...

How the consumer price index (CPI) is constructed and why it is an imperfect measurement of the cost of living.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

How the consumer price index (CPI) is constructed and why it is an imperfect measurement of the cost of living?

The consumer price index (CPI) is a measure of the overall cost of the goods and services bought by a typical consumer. It is used to monitor changes in the cost of living over time.

When the CPI rises, the typical family has to spend more dollars to maintain the same standard of living.

Inflation refers to a situation in which the economy’s overall price level is rising. The inflation rate is the percentage change in the price index from the preceding period.

The CPI is an accurate measure of the selected goods that make up the typical bundle, but it is not a perfect measure of the cost of living.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Why the consumer price index seems to be an imperfect measure of the cost of living?
Why the consumer price index seems to be an imperfect measure of the cost of living?
We measure inflation using the Consumer Price Index (CPI), but the CPI is an imperfect measure...
We measure inflation using the Consumer Price Index (CPI), but the CPI is an imperfect measure of prices because of three problems. Identify those three problems and discuss whether they overstate or understate the level of inflation in the economy. In your discussion, analyze how by deviating from the “typical consumer” that the CPI attempts to track affects the problems in the CPI.
We measure inflation using the Consumer Price Index (CPI), but the CPI is an imperfect measure...
We measure inflation using the Consumer Price Index (CPI), but the CPI is an imperfect measure of prices because of three problems. Identify those three problems and discuss whether they overstate or understate the level of inflation in the economy. In your discussion, analyze how by deviating from the “typical consumer” that the CPI attempts to track affects the problems in the CPI.
The measurement problems in the consumer price index (CPI) as an indicator of the cost of...
The measurement problems in the consumer price index (CPI) as an indicator of the cost of living are important because many government programs use the CPI to adjust for changes in the price level. Select one: True False Suppose that in 2016, the CPI for energy rose from 183.4 to 193.3 while the CPI for all items rose from 236.5 to 241.4. As a result the inflation rate for energy is lower than the overall inflation rate in 2016. Select...
“The consumer price index (CPI) is a measure of the cost of living during a particular...
“The consumer price index (CPI) is a measure of the cost of living during a particular period. It measures the overall cost of the goods and services bought by a typical consumer.” Discuss three problems or biasness which are associated with consumer price index
why consumer price index (CPI) overstates inflation when compared to inflation rate determined by using GDP...
why consumer price index (CPI) overstates inflation when compared to inflation rate determined by using GDP deflator.
The consumer price index (CPI) is a​ fixed-weight index. It compares the price of a fixed...
The consumer price index (CPI) is a​ fixed-weight index. It compares the price of a fixed bundle of goods in one year with the price of the same bundle of goods in some base year. Suppose the market basket to compute the consumer price index consists of 200 units of good​ X, 175 units of good ​Y, and 60 units of good Z. Year 2013 is the base year. Prices of these goods for the years​ 2013, 2014, and 2015...
Why does the Consumer Price Index often overstate the changes in the (true) cost of living?
Why does the Consumer Price Index often overstate the changes in the (true) cost of living?
The traditional Consumer Price Index (CPI) differs from the Chained-CPI because it doesn’t consider that people...
The traditional Consumer Price Index (CPI) differs from the Chained-CPI because it doesn’t consider that people may substitute similar goods when one thing gets too expensive. True False
CPI (Consumer Price Index ) – for Medical Supply X The price of Medical supply X...
CPI (Consumer Price Index ) – for Medical Supply X The price of Medical supply X in year 2019 is $65, in Year 1982-184 is $25. The CPI in 2012 is 240. a. What is the CPI of Medical X in year 2019? b. What is the price of Medical supply X in year 2010 when CPI equals to 220? c. What is the inflation level from year 2012 to 2019 for this Medical supply X?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT