Get an answer in 5 minutes

We'll notify as soon as your question has been answered.

Plus iconAsk a question to our educators
ECONOMICS
Asked by Rania

What are the benefits and drawbacks of measuring inflation using index numbers such as CPI/RPI?

It's issue usually hinges on accuracy. Here's a few reasons, specifically around CPI: Few households are average – the published figure for inflation is rarely the actual rate of inflation experienced by different people 1. The CPI is not fully representative - it will be inaccurate for the ‘non-typical’ household, e.g. 14% of the CPI index is devoted to motoring costs - inapplicable for non-car owners. 2. Spending patterns: e.g. Single people have different spending patterns from households that have one or more children 3. Changing quality of goods and services: Although the price of a good or service may rise, this may also be accompanied by improvements in quality / performance of the product 4. New products: The CPI is slow to respond to new products and services – the CPI basket is changed each year but only a few items fall out / come in

Eva's profile picture
Eva Sendrino
·

238 students helped

Similar Economics questions

What is Q&A on Scoodle?

At Scoodle we understand that everyone learns in a different way. Some people learn through practice, using essays and notes; others prefer video lessons to watch and learn, some just need help with a specifically hard question, while some learn best 1-on-1 tutoring sessions. At Scoodle we cater for all types of learning styles and needs. From GCSE Maths video lessons to A-level English essays and specialist educators in every subject - we’ve got you covered.

Faces of students on ScoodleFaces of students on ScoodleFaces of students on Scoodle
Scoodle has helped over 131,000 students so far

5 Economics tutors available now

Need help with Economics?

Getting expert help from a tutor is a great way to improve your Economics grades.

Learn with Video Lessons
A-Level Physical Chemistry
1hr 9m · 7 videos
Ibrahim's profile picture
Ibrahim Dangra
·

1.4k students helped

A-Level Physical Chemistry
GCSE Maths - Numbers
1hr 28m · 8 videos
Paja's profile picture
Paja Kruzikova
·

649 students helped

GCSE Maths - Numbers
How to Analyse (Unseen) Poetry
20m · 7 videos
Nina's profile picture
Nina Modak
·

2k students helped

How to Analyse (Unseen) Poetry
COVID-19 Guidance For Students
30m · 5 videos
Jackie's profile picture
Jackie Jones
·

802 students helped

COVID-19 Guidance For Students
Academic Integrity
29m · 5 videos
Jackie's profile picture
Jackie Jones
·

802 students helped

Academic Integrity
Analysis of 'Ozymandias' by Percy Bysshe Shelley
42m · 4 videos
Nina's profile picture
Nina Modak
·

2k students helped

Analysis of 'Ozymandias' by Percy Bysshe Shelley