CONSUMER PRICE INDEX ~

What components make up the CPI ?

CPI (Consumer Price Index) data is gathered by sampling prices and using a set of goods as weights.  These sets would be renewed every few years.

How is CPIgathered ?

How does the weightingsystem operate and why is it

necessary ?There are 2 types of data needed to complete the CPI; price system & weighting system. The weighting system are estimates of the shares of the different types of expenditure. It is necessary because it is needed to complete the CPI, if it didn’t exist then we wouldn’t have a CPI in the first place.

Explain whether you believeCPI is reliable.My opinion- To me, I think that CPI definitely has its use, but its not exactly exact. I think it overestimates the inflation level. For example, housing and energy costs are their real costs, whereas the housing market just consistently changes.

How often is the CPI reviewed ?These sets would be renewed every few years.  In some countries CPI is measured monthly, while in other countries they are measured quarterly.

What was used before the CPIto measure inflation ?

According to many other websites, before CPI there was PPI, Producer Price Index. It’s a group of indexes that measures the average change in selling prices received by domestic producers of goods and services. It measures price change from the perspective of the seller.

Rank the major Australian cities according to how

expensive it to live in each.1- Sydney2- Melbourne 3- Perth4- Canberra5- Brisbane 6- Adelaide7- Hobart