Consumer Price Index
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The Bureau of Labor Statistics follows five steps to calculate Consumer Price Index. What are three strengths and three weaknesses of the Consumer Price Index calculation.
? What are the characteristics of the strengths?
? What are the characteristics of the weaknesses?
? If the CPI is imperfect, why do we use it?
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Solution Summary
This solution talks about Labor Statistic Calculation of the Consumer Price Index. It explores the strengths and weaknesses of the Consumer Price Index calculation.
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CONSUMER PRICE INDEX
CHARACTERISTICS OF STRENGHTS:
1. It provides a measure of inflation:
2. It can be used to track changes in prices of goods and services purchased by households;
3. It provides a cost of living model which reduces the reported level of inflation.
CHARACTERISTICS OF WEAKNESSES:
1. The index is scaled so that it is 100 at a chosen period of time. The selection of this period of time is arbitrary.
2. There are ...
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- BSc , University of Calcutta
- MBA, Eastern Institute for Integrated Learning in Management
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