Question
Explain the term Consumer Price Index
✓
Answer
Consumer price index numbers measure the average change overtime in the price paid by the ultimate consumers of a specified basket of goods and services. These index numbers are also called (i) Cost of living index numbers, (ii) Retail price index numbers, and (iii) Price of living index number. The need for constructing these index numbers arise from the fact that the general price index numbers fail to give an exact idea of the effects of the change in the general price level on the cost of living of different groups of population. Such index numbers include the following goods.
(i) Food
(ii) Clothing
(iii) Fuel and lighting
(iv) Housing
(v) Education
(vi) Miscellaneous
(i) Food
(ii) Clothing
(iii) Fuel and lighting
(iv) Housing
(v) Education
(vi) Miscellaneous
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