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CPI
Is the CPI a true measure of inflation?
Solution
Yes, the CPI adds the price changes of the basket of commodities. It calculate the changes in the
cost of bundles from one year to the next year. It includes commodities such as food, beverages,
transportation, medicare, education , communication and etc... It is the most useful statistics for
finding the changes in the inflation.
The CPI is calculated by the foloowing way.
CPI= Cost of market basket in the current year/ Cost of market basket in the base year*100.

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CPIIs the CPI a true measure of inflationSolutionYes, the C.pdf

  • 1. CPI Is the CPI a true measure of inflation? Solution Yes, the CPI adds the price changes of the basket of commodities. It calculate the changes in the cost of bundles from one year to the next year. It includes commodities such as food, beverages, transportation, medicare, education , communication and etc... It is the most useful statistics for finding the changes in the inflation. The CPI is calculated by the foloowing way. CPI= Cost of market basket in the current year/ Cost of market basket in the base year*100.