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Inaccuracies Of The Consumer Price Index(CPI)
Beginning of paper
Inaccuracies of the Consumer Price Index(CPI)
The Consumer Price Index is a measure of the prices of 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 .... Middle of paper
.... and therefore the prices should be
higher. The CPI, however, assumes that the increases 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 ....
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Number of words: 452
Number of pages: 2 (approx. 250 words per double-spaced page)
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