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1. CheckPoint: Calculation of the Consumer Price Index
(CPI)
Due Date: Day
6 (Individual forum)
The
Consumer Price Index (CPI) is a measure of the overall cost of the goods and
services bought by a typical consumer.
Each month, the Bureau of Labor Statistics follows five steps to calculate
Consumer Price Index. Complete the following
questions:
·
List the five steps that the BLS follows to calculate the CPI.
·
Explain the three problems associated with the calculation of the CPI.
·
The fifth step of calculating the CPI computes the inflation rate. The inflation rate is a very important
measure of how well our economy is doing.
Answer the following questions:
o
Suppose the inflation rate is 4% (per year) and your income increases
by 6% (per year). Are you better or
worse off? Explain.
o
Suppose the inflation rate is 8% (per year) and your income increases
by 6% (per year). Are you better or
worse off? Explain.
·
Format your paper according to APA standards.
·
Post your essay as a Microsoft© Word attachment.
1.
Please
note: You will not use Appendix D to
complete your checkpoint.
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