CPI (Consumer Price Index) Hoda Alrihani 9D 2012

What components make up the CPI? The components that make up the CPI are food & beverages, housing, apparel (clothing), transportation, medical care, recreation, education & communication and other goods and services.

How is CPI data gathered? The Australian Bureau of Statistics has economic assistants who are responsible for visiting and/or talking to many goods and services providers across Australia. They gather, record and update the data monthly, which serves to track and measure price changes in the CPI.

How does the weighting system operate and why is it necessary? The weighting system incorporates the average changes in the quantity of goods purchased, along with standard pricing effects. It is necessary because it reflects the situations where customers (or consumers) shift the weight of their purchases from one area of spending to another.

Explain whether you believe the CPI is reliable. I think the CPI is quite reliable because it is involved in a lot of direct research (such as collecting data through surveys and so on) and because it updates its information repetitively and often.

How often is the CPI reviewed? The CPI is reviewed every few years according to the Australian Bureau of Statistics. Since its production in 1960, it has been reviewed sixteen times.

What was used before the CPI to measure inflation? Before the CPI was used to measure inflation the RPI (Retail Price Index) was used. It is still used in the United Kingdom by the news media.

Rank the major Australian cities according to how expensive it is to live in each. The major Australian cities that are most expensive to live in are as follows: (In order) 1. Sydney 2. Melbourne 3. Perth 4. Canberra 5. Brisbane 6. Adelaide 7. Darwin Sydney Melbourne Perth Canberra Brisbane Adelaide Darwin