ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The CPI represents changes in prices of all goods and services purchased for consumption by urban households. User fees (such as water and sewer service) and sales and excise taxes paid by the consumer are also included. Income taxes and investment items (like stocks, bonds, and life insurance) are not included.

Detailed explanation-2: -The consumer price index (CPI) is a means to measure the weighted average cost of consumer bags of goods and services such as food, medical care, and transportation. It is evaluated by taking a cost change of each product in the prearranged bags of goods and averaging them.

Detailed explanation-3: -Example of calculating CPI formula The sum for 2020 products is $8.50. When you divide the current product price total by the past price total, your equation is 8.50 / 6.75 = 1.26. You’d then multiple this total by 100, which would be 1.44 x 100 = 125.9.

Detailed explanation-4: -All categories are assigned weights This data is collected by the National Statistics Office (NSO) from 1181 village markets and 1114 urban markets distributed over 310 towns/cities of the country. Currently, the consumer price index (CPI) is calculated by taking into consideration 299 items.