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Published byGeorge Gaines Modified over 7 years ago
Consumer Price Index (CPI) Monique J.
What components make up the CPI? The CPI represents all goods and services purchased from the reference population. These goods and services include; Food and Beverages (Milk, Coffee, Meat, Wine, Full service meals, Chocolate, etc) Housing (Bedroom furniture, owners rent prices, rent of primary residence) Apparel (Womans heels, shoes, dresses, skirts, etc. Mens sneakers, sweaters, shirts, etc.) Transportation (Airline fares, gasoline, Vehicle insurance, New vehicles.) Medical Care ( prescribed drugs, hospital services, eye care, medical supplies.) Recreation (electronics, toys, pet products, sport equipment) Education and Communication (postage, telephone services, school tuition, computer softwares.)
How is CPI data gathered? Every month, economic assistants (data collectors) either visit or contact many retail stores, rental units, doctor offices or service establishments to gather info on the prices of some of the goods and services stated before. The information in which they record is the price of the goods or services each month, which represent a scientifically selected sample of the prices paid by consumers.
How does the weighting system operate and why is it necessary? CPI is weighted according to the relative importance of goods and services in the total expenditures of consumers.
Explain whether you believe the CPI is reliable. I believe that the CPI is not reliable because it excludes energy prices and they are volatile. Which could make the CPI readings very inaccurate.
How often is the CPI reviewed? The CPI get’s reviewed every time they see the increase or decrease in the CPI selected goods and services. They review the CPI as soon as they see a change in the sale patterns.
Rank the major Australian cities according to how expensive it is to live in each 1.Sydney 2.Melbourne 3.Perth 4.Canberra 5.Brisbane 6.Adelaide 7.Darwin
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