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Econ- Chap 6

# Econ- Chap 6 - Measuring the Cost of Living-6 x In...

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Macroeconomics: Ch 6 Measuring the Cost of Living-6 In determining the cost of living, Statistics Canada first identifies a “market basket” of goods and services the typical consumer buys. Monthly, Statistics Canada surveys consumers to determine what they buy and the overall cost of the goods and services they buy.

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Principals of Macroeconomics: Measuring the Cost of Living The Consumer Price Index (CPI) is used to monitor changes in the cost of living (i.e. the selected market basket) over time. When the CPI rises, the typical family has to spend more dollars to maintain the same standard of living. The goal of the CPI is to measure changes in the cost of living. It reports the movement of prices not in dollar amounts, but with an index number .
Principals of Macroeconomics: Ch 11 First Canadian Edition What’s in the CPI’s Basket? Food 18.0% Household 10.0% Alcohol 5.0% Recreation 10.0% Clothing 7.0% Health 4.0% Transportation 18.0% Shelter 28.0%

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The Consumer Price Index (CPI) Inflation Inflation refers to a situation in which the economy’s overall price level is rising. The inflation rate inflation rate is the percentage change in the price level from the previous period. The consumer price index (CPI) consumer price index (CPI) is a measure of the overall cost of the goods and services bought by a typical consumer. Statistics Canada reports the CPI monthly. It is used to monitor changes in the cost of living over time.
Principles of Macroeconomics What is an Index Number? An Index Number is developed with an arbitrary base (usually starting with 100) that indicates a change in magnitude relative to its value at a specified point in time.

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Principles of Macroeconomics Calculating the Consumer Price Index and the Inflation Rate Determine what goods are most important to the typical consumer: Fix the Basket
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Econ- Chap 6 - Measuring the Cost of Living-6 x In...

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