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

Describe keynesian cross model, Q. Describe Keynesian cross model? Keyn...

Q. Describe Keynesian cross model? Keynesian cross model is a simple version of what we call the 'complete Keynesian model' or simply the Keynesian model. Keynesian model has a

Economic concepts models- demand/supply concepts, Questions: ...

Questions: Search through newspapers for ONE article that is relevant to the economics concepts. You are also required to attach the article to your final report

Sons college education, On the day his son was born, a father decided to es...

On the day his son was born, a father decided to establish a fund for his son's college education. The father wants the son to be able to withdraw $4000 from the fund on his 18th b

What are the potential advantages of economic growth, What are the potentia...

What are the potential advantages of economic growth? The potential advantages of growth include • More goods and services are accessible to satisfy more want and requireme

Tennis club, Suppose you belong to a tennis club that has a monthly fee of ...

Suppose you belong to a tennis club that has a monthly fee of $75 and a charge of $5 per hour to play tennis.

Relationship between l and p, Q. Relationship between L and P? • As lon...

Q. Relationship between L and P? • As long as L is smaller than LB, L may change with no change in prices. In this range, there is no relation between L andP. • When L is betw

Impulse response functions, After an oil price shock was impacted upon the ...

After an oil price shock was impacted upon the other five variables in the model, many interesting results were found. I have already demonstrated that oil Granger causes i

Money and credit, MONEY AND CREDIT  In any modern economy, the quantity...

MONEY AND CREDIT  In any modern economy, the quantity of money, aggregate volume of credit and its sectoral composition are important variables which exert significant influenc

Determine the daily amount and ipa, A brewery produces two kinds of beer, s...

A brewery produces two kinds of beer, stout and IPA . Each batch of stout sells for $60 per unit while each batch of IPA sells for $108. Both products require malt, hops, barley, f

Relation between money - wealth and income, Q. Relation between Money - wea...

Q. Relation between Money - wealth and income? Money isn't the same as wealth. An individual may be very wealthy however have no money (for instance by owning stocks and real e

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