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Inaccuracies Of The Consumer Price Index(CPI)
Part 1 of Paper
....f a fixed market
basket of some 300 consumer goods and services purchased by a "typical" urban
consumer. The 1982-1984 period serves as the base period so analysts can compare
other year's changes with this base period. The composition of the market
basket is fixed in the base period and is assumed not to change from .... Part 2 of Paper
....s in prices is a result of
inflation rather than quality improvements which is false. Here also, the CPI
overstates the rate of inflation.
Many consumers do not mind the overcompensation of the CPI because in
most cases it means more money in their pockets, but there are some consequences.
This may cause an ongoing inflation trend. The reason why the government does
not restrict it is because they are worried about getting re-elected. Even if
the President does call for a revision of the CPI, C.... |
| Number of words: 452 - Approximate pages: 2 |
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