Do you think the CPI price changes affect all consumers in the economy to the same extent? If not, how do you determine who “wins” and who “loses” in this particular situation? Explain why these differences would exist.

Need a paper written? Our academic experts can create an original essay on any subject for ~~$13.00~~ $11/page Learn More

The consumer price index is a means of measuring price changes in the economy over a selected period. Using this parameter, one can assess the economy’s direction and the standard of living of people in the country. However, since this value is average, it does not reflect all the intricacies of the economy, such as for example, regional prices.

Because of this, changes in CPI affect consumers in the economy differently. A small number of people living in rich regions and having a basket of goods significantly higher than the CPI may not feel this parameter increase at all. At the same time, residents of remote regions with low income may find themselves in a challenging situation, as they will be forced to reduce their list of goods.

Thus, since the CPI is average, people whose shopping basket is significantly higher than the average benefit from this calculation, while people on the other side of the average are at a disadvantage. Such differences exist due to significant simplifications in calculating the parameter, the lack of a more detailed approach, as well as variations in the quality of goods.

Rate the answer:

Further research on topic

Answer by Academic.tip's expert

An answer to this question is provided by one of our experts who specializes in business & economics. Let us know how much you liked it and give it a rating.

Cite this page

Select a citation style:

References

Academic.Tips. (2023) 'Do you think the CPI price changes affect all consumers in the economy to the same extent? If not, how do you determine who “wins” and who “loses” in this particular situation? Explain why these differences would exist'. 11 March.

Reference

Academic.Tips. (2023, March 11). Do you think the CPI price changes affect all consumers in the economy to the same extent? If not, how do you determine who “wins” and who “loses” in this particular situation? Explain why these differences would exist. https://academic.tips/question/do-you-think-the-cpi-price-changes-affect-all-consumers-in-the-economy-to-the-same-extent-if-not-how-do-you-determine-who-wins-and-who-loses-in-this-particular-si/

References

Academic.Tips. 2023. "Do you think the CPI price changes affect all consumers in the economy to the same extent? If not, how do you determine who “wins” and who “loses” in this particular situation? Explain why these differences would exist." March 11, 2023. https://academic.tips/question/do-you-think-the-cpi-price-changes-affect-all-consumers-in-the-economy-to-the-same-extent-if-not-how-do-you-determine-who-wins-and-who-loses-in-this-particular-si/.

1. Academic.Tips. "Do you think the CPI price changes affect all consumers in the economy to the same extent? If not, how do you determine who “wins” and who “loses” in this particular situation? Explain why these differences would exist." March 11, 2023. https://academic.tips/question/do-you-think-the-cpi-price-changes-affect-all-consumers-in-the-economy-to-the-same-extent-if-not-how-do-you-determine-who-wins-and-who-loses-in-this-particular-si/.

Bibliography

Academic.Tips. "Do you think the CPI price changes affect all consumers in the economy to the same extent? If not, how do you determine who “wins” and who “loses” in this particular situation? Explain why these differences would exist." March 11, 2023. https://academic.tips/question/do-you-think-the-cpi-price-changes-affect-all-consumers-in-the-economy-to-the-same-extent-if-not-how-do-you-determine-who-wins-and-who-loses-in-this-particular-si/.

Work Cited

"Do you think the CPI price changes affect all consumers in the economy to the same extent? If not, how do you determine who “wins” and who “loses” in this particular situation? Explain why these differences would exist." Academic.Tips, 11 Mar. 2023, academic.tips/question/do-you-think-the-cpi-price-changes-affect-all-consumers-in-the-economy-to-the-same-extent-if-not-how-do-you-determine-who-wins-and-who-loses-in-this-particular-si/.

Copy