ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The CPI affects nearly all Americans because of the many ways it is used. Some examples of how it is used follow: As an economic indicator. The CPI is the most widely used measure of inflation and is sometimes viewed as an indicator of the effectiveness of government economic policy.

Detailed explanation-2: -Retail Prices Index (RPI) Currently calculated by the Office for National Statistics (ONS), it monitors the monthly change in prices of goods and services used by most households. The RPI was preceded by the Cost of Living Index from 1914 to 1947 and the Interim Index of Retail Prices from 1947 to 1956.

Detailed explanation-3: -The Consumer Price Index (CPI) consists of a family of indexes that measure price change experienced by urban consumers. Specifically, the CPI measures the average change in price over time of a market basket of consumer goods and services. The market basket includes everything from food items to automobiles to rent.

Detailed explanation-4: -The Laspeyres Price Index is a consumer price index used to measure the change in the prices of a basket of goods and services relative to a specified base period weighting. Developed by German economist Etienne Laspeyres, the Laspeyres Price Index is also called the base year quantity weighted method.