ECON 1000 Chapter Notes - Chapter 6: Gdp Deflator, Canada Pension Plan
Document Summary
Chapter 6 - measuring the cost of living. Consumer price index (cpi: a measure of the overall cost of goods and services bought by a typical customer, cpi is used to monitor the cost of living over time. Determine what prices are more important to the typical customer. If the typical customer buys more of good 1 than good 2, the price of good 1 is given more weight in measuring the cost of living. Statistics canada sets these weights by surveying consumers to find out the basket of goods the typical consumer buys: find the prices. Find the prices of each of the goods and services in the basket for each point in time: compute the basket"s cost. Use data on prices to calculate the cost of the basket of goods and services at different times: choose a base year and compute the index.