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    CPI

    RPI

    RPIX

    please, THANKS IN ADVANCE!
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    (Original post by James E Walker)
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    I have still dont get
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    http://www.economicshelp.org/blog/13...-rpix-and-cpi/
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    What is it that you don't understand?
    CPI is consumer price index and is used to measure the price levels in an economy (use that as a definition)
    RPI is retail price index and is does the same as CPI but it takes into consideration housing costs (use that as a definition)
    RPIX is the same as RPI but it excludes mortgage repayments (use that as a definition)

    CPI is measured by:
    - A basket of 650 goods and services
    - Take the price of each good and get an index value
    - Compare it to last years index
    - The basket is updated yearly, but the prices are updated monthly

    Then all you need to know are the problems with using CPI:
    - Basket is only updated every year so it is not updated enough
    - Some goods won't effect people, for example if the price of dog food goes up then that will only impact people who have dogs.
    - Human error when calculating the prices

    CPI will only be a 6 mark question so you'll just have to define it (like I said at the beginning) or and analyse it which would be explaining the problems with it. Hope this helped
 
 
 
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