Discuss the consumer price index

Reference no: EM131443010

Question: The Consumer Price Index (CPI) measures changes in the cost of living by comparing the cost of buying a certain bundle of goods and services over time. The quantities of each commodity remain the same from year to year but their prices change, so changes in the index reflect the weighted average of changes in the prices of goods and services. Explain how the behavior assumed in the CPI conflicts with the way consumers actually respond to price changes. Do you think the CPI overestimates or underestimates the effect of price changes on consumers?

Reference no: EM131443010

Questions Cloud

What role does accounting play : What is unethical about this situation? Who can be harmed? How can they be harmed? What role does accounting play?

Path of revolution the conclusions were different : Why do you think that though Russia and France the two nations went through the same path of Revolution the conclusions were different?

How might you explain their international pricing decisions : Think in terms of customers, competitors, and costs. How might Ikea be different than a traditional furniture store? How might you explain their international pricing decisions?

Collapse of communism in eastern europe : What were the primary causes for the collapse of communism in Eastern Europe (Poland, Germany, Czechoslovakia, Hungary, Romania, etc) in 1989, and the USSR (Russia, Ukraine, Belarus, Georgia, etc) in 1991

Discuss the consumer price index : The Consumer Price Index (CPI) measures changes in the cost of living by comparing the cost of buying a certain bundle of goods and services over time.

Importance of american history towards : Discuss the importance of American History towards the economic needs of the nation?

Historical context and significance : Identify the following event listed below. In a brief paragraph, explain who or what it is, where and when it occurred-identifying the time period (be as specific as possible with the date)-and the historical context and significance.

Prepare a statement of net position for water utility fund : Prepare a statement of revenues, expenses, and changes in fund net position for the Water Utility Fund for the year ended June 30, 2017. Prepare a statement of net position for the Water Utility Fund as of June 30, 2017.

Americas in terms of culture-religion and technology : Explain the incredible impact that Spain's conquest had on Americas in terms of culture, religion and technology?

User Account

All Pages