c22a-kl - The CPI only includes goods and services...

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22.a. The Consumer Price Index The Consumer Price Index, or CPI, is a measure of price level. It can be described as: -a measure of the overall level of prices that shows the cost of a fixed basket of consumer goods relative to the cost of the same basket in a base year. For example, to calculate the current year CPI: Current year CPI = (Current year total expenditures) x 100 (Current year total expenditures at base year prices)
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Unformatted text preview: The CPI only includes goods and services purchased by consumers. It is also classified as a fixed-weight price index, which takes the quantities in the base year as being the “typical” goods bought by an average consumer during that year, and then uses those quantities once again as weights to calculate the index each year....
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This note was uploaded on 09/25/2008 for the course ECON 160 taught by Professor Baim during the Summer '98 term at UCLA.

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