Explain consumer price index, Macroeconomics

Assignment Help:

Q. Explain Consumer Price Index?

CPI is a price index of a particular basket known as the CPI-basket. CPI-basket comprise essentially all the servicesand goods consumed in a country -gas,food, medicine, haircuts, house rent, transportation and so on. Composition of the CPI basket is determined by value of what is consumed in the country - the larger the value of entire consumption of a good or service, the larger the weight in basket. For illustration, if we spend twice as much on apples as on pears, apples would have twice the weight in the basket.  The particular details of the composition of basket and how the CPI is calculated are complex and vary somewhat between nations. Figure below demonstrates CPI for Germany after the reunification starting at January 1991. This data has 2005 as the reference year. This means that CPI is constructed in such a way that CPI is exactly equal to 100 on average during 2005.

Figure

Consumer price index (CPI) for Germany 1991 - 2010. Source: OECD.

813_Explain Consumer Price Index.png


Related Discussions:- Explain consumer price index

What is store of value - economic functions of money, Store of value - Econ...

Store of value - Economic functions of money If you are a fisherman and have a temporary surplus of fish that you want to store for the future, storing the fish might not b

Exam, real gdp measures?

real gdp measures?

Money, determinants of money supply

determinants of money supply

What are the international economic crisis, What are the international econ...

What are the international economic crisis A current account surplus can only take place in one nation if there is a current account shortage in another country. So it makes no

Market clearing values of wages, On the next page is a graph of a labor mar...

On the next page is a graph of a labor market in equilibrium, with market clearing values of wages and hours of employment being W 1 and E 1 respectively.  a.  The Federal gov

Ratios, How to find fixed costs for capacity ratio calculating from annual ...

How to find fixed costs for capacity ratio calculating from annual report?

Personal income tax is progressive, Because the structure of the personal i...

Because the structure of the personal income tax is progressive, a larger share of income is taxed at higher rates as real income increases. Therefore, economic growth automaticall

Find real interest rate and nominal interest rate, #questionAssume that an ...

#questionAssume that an economy''s GDP Y=5000. Also assume that the government runs a deficit where tax revenue T=1000 and government expendituresG= 1500. The consumption function

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd