Purchase Solution

Consumer Price Index

Not what you're looking for?

Ask Custom Question

I am looking for 3 strengths and 3 weaknesses of the attached mock calculation of the CPI.

What identifies these characteristics and if the CPI is imperfect, do we need to use it?

Attachments
Purchase this Solution
Solution Summary

3 strengths and 3 weaknesses of calculation of the consumer price index is examined.

Solution Preview

As you can see from the information provided, CPI uses a base year to track the changes in a specific basket of goods for a specific group of people. The basket of goods is intended to reflect all of the items a typical urban consumer buys to achieve some minimum standard of living in some base period (currently, 1982-1984). The basket is adjusted every ten years or so. The CPI does not count the price of each item equally but weights it according to its share of total household expenditures in the base period, so that changes in the index from one period ...

Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

View More Free Quizzes
Related BrainMass Solutions

  • Wal-Mart:

    Specifically the consumer price index measures the average change in price in the urban areas. In the US the consumer price index is often used as a proxy for inflation rate.

  • Value of the Consumer Price Index

    the value of the consumer price index using an established formula.

  • Consumer Price Index for Current and Past Value

    644204 Consumer Price Index for Current and Past Value 1) Use the Consumer Price Index below to answer the question. What was the purchasing power of $1 in 1987 in terms of 1998 dollars? 2) Use the Consumer Price Index below to answer the question.

  • Calculating price based on a consumer price index.

    3530 Calculating price based on a consumer price index. The consumer price index for a new car in 1990 was 110.2, and in 1995 it was 136.5. If the price of the car was $12,880 in 1990, what was the price in 1995?

  • Calculation of Consumer Price Index

    642891 Calculation of Consumer Price Index Calculate a new consumer price index for the data in the following exhibit.

  • Regression analysis in Minitab

    for consumer durables, Pn = Aggregate price index for consumer nondurables, Ps = Aggregate price index for consumer services, Use Minitab I.

  • US Gasoline Market Slope Coefficient, Demand Equation

    CPIn is the consumer price index for consumer nondurables, ?

  • Applying Key Economic Concepts to CPI

    The consumer price index represents the spending pattern of each consumer group.

  • Consumer Price Index

    The consumer price index for engineering economics is provided.

  • Consumer Price Index

    131689 Labor Statistic Calculation of the Consumer Price Index 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. ?

View More Related Solutions