Question

Over dinner with his friend Nathan, Dominic complained about how prices have increased a great deal over the past year. Nathan disagreed and said that the prices of some goods have gone up a bit, but other prices have declined, noting that you can get some good buys on houses right now. Nathan feels that the average price of consumer goods hasn't changed. Nathan and Dominic can refer to the ________ to learn how government economists currently view the price situation.

Answer 1

CPI

Explanation

CPI measures the average changes in prices overtimes that consumers pay for a basket of goods and services commonly known as inflation. It attempts to qualify the aggregate price level in an economy and thus measure the purchasing power of the country unit of currency. The weighted average of the prices of goods and services that approximates an individual's consumption pattern used to calculate the CPI.

• CPI is used as an economic indicator.
• It is more used to measure inflation.
• CPI cover professionals, self-employed, poor, unemployed and retired person
• Two care reported each time CPI-W and CPI-U