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The consumer price index (i.e. CPI) is the most commonly used measure of changes in the general level of prices in Australia. Discuss some of the advantages and disadvantages of using this measure.

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Bunny Greenfelder
Bunny GreenfelderLv2
7 Jan 2019

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Related questions

What index is used to measure the average prices paid by a typical family? 

A. consumer price index (CPI).

B. Producer price index (PPl)

C. inflation rate index.

D. aggregate price level index

Measures of Inflation The GDP deflator is the broadest, most inclusive measure of change in the country's price level since it includes all final goods and services produced and sold. But the GDP deflator is not used by the government or economists as the benchmark measure of inflation; instead, the consumer price index (CPI) is used to determine changes in the cost of living. What is the shortcoming of the GDP deflator as a measure of inflation for households, and why is the CPI considered to be a more useful measure?

Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator.

The GDP deflator for this year is calculated by dividing the 1. ........... using 2............ by the 3............ using 4............ and multiplying by 100.

However, the CPI reflects only the prices of all goods and services 5.............. 

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