COMMERCE 1BA3 Lecture Notes - Lecture 6: Hot Dog, Gdp Deflator, Core Inflation
7 May 2016
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Document Summary
We need to develop a way of measuring purchasing power. Consumer price index (cpi) a measure of the overall cost of the goods and services bought by a typical consumer. Cpi is used to monitor changes in the cost of living over time. Calculated and reported by statistics canada every month. E. g. if cpi is 175, it means price of basket is 175% more in the current year than the base year: compute the inflation rate. Inflation rate (cid:0) from the preceding period the percentage change in the price index. Statistics canada uses data on the prices of over 600 different goods and services to calculate cpi. For simplification, consider how cpi is calculated using a basket of only two goods: hot dogs and hamburgers: hot dog is more important so has a higher weight. In addition to consumer price index for overall economy, stats.
