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

Assumptions of the AS-AD model, Q. Assumptions of the AS-AD model? The ...

Q. Assumptions of the AS-AD model? The most significant change we make going from IS-LM model to AS-AD model is to allow P to be endogenous. As P was constant in IS-LM model, w

International trade, Suppose home cost pricing prevails in international tr...

Suppose home cost pricing prevails in international trade, while world output is declining. Consider two economies, A and B, both having floating exchange rates and the same moneta

Calculate percent removal pollutant and steady state, You are considering t...

You are considering three design alternatives for treating a pollutant in wastewater using a first-order process ( k = 1 min -1 ). The total flow is 10 million gallons per day (mg

Economic functions of money - a medium of exchange, Economic functions of m...

Economic functions of money - A medium of exchange This is its most important role. Without money we would live in a barter economy where we would have to trade goods and

Define the term - productivity, Define the term - Productivity Producti...

Define the term - Productivity Productivity is the concept which measures how outputs can be maximised from given inputs. In factories labour productivity is normally calculate

Demand analysis, how the demand of pizzas in pizza hut affecting the market...

how the demand of pizzas in pizza hut affecting the market of fast food

Millions of americans purchase, Each day millions of Americans purchase mil...

Each day millions of Americans purchase millions of goods and services. These goods and services are generally readily available, as long as you have the necessary money to purchas

Aggregate supply and demand, Aggregate Supply and Demand 1. The equati...

Aggregate Supply and Demand 1. The equation for expenditure GDP is 2. Sketch a fully labeled aggregate supply and demand diagram for an economy that is in full employment equ

Trade cycle, policy measures to control trade cycle

policy measures to control trade cycle

Combination price of capital decreased, In reference to the above question,...

In reference to the above question, assume you know the combination of inputs that minimizes cost. What would happen to this input combination if the price of labor increased? What

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