Economics

posted by .

Why is it that the people responsible for pensions use the CPI as an indicator for inflation rather than the GDP deflator? Why is the CPI better?


what is rconimics


I believe the biggest reason is the base for each measures. CPI measures the weighted average change in prices for a market basket of consumer goods + services. The GDP deflator measures changes in prices of all goods+services included in GDP including investment and government spending.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Purchasing Power of Income/ Economy

    We use the _________ to determine the purchasing power of income. A. Interest rate. B. Real GDP. C. CPI. D. GDP. E. None of the above. Check this site for your answer. http://www.bls.gov/cpi/
  2. Economics - (*CPI*)

    In Brazil, the reference base period for the CPI is December 1993. In September 2000, prices had risen by 1,565.93 percent since the base period. The inflation rate in Brazil during the year ending September 2001 was 6.46 percent, …
  3. macroeconomics

    Year - 2000 Nominal GDP: 9,817 Real GDP: ___________ GDP Deflator: 1 Inflation 2.2 Real GDP Per capita: _________ Population 283.7 Year – 2001 Nominal GDP: ________ Real GDP: 9,891 GDP Deflator: _________ Inflation 2.4 Real GDP Per …
  4. macroeconomics

    Suppose in 2009 the united states congress passes a minimum wage law that increases the minimum wage (the lowest legal wage) to 7.25 per hour and has a provision that increases the minimum wage at the beginning of each year based on …
  5. Quantative Reasoning

    Explain what the CPI is and do you think that the CPI accurately measures the rate of inflation?
  6. adult education

    Explain what the CPI is and do you think that the CPI accurately measures the rate of inflation?
  7. Economics (inflation)

    Hello! Could someone please check my answers for the first 2 problems and help me out with the 3rd?
  8. economics

    What are the following variables used for in economics: Nominal GDP, Real GDP, GDP Deflator and CPI?
  9. Math

    A basket of goods and services representative of the CPI cost $2750 when the CPI stood at 118.3. What did the basket of goods cost 10 years earlier, when the CPI was at 93.1?
  10. Math

    A country's Consumer Price Index (CPI) is a measure of the cost of living. The inflation rate is the annual relative rate of change of the CPI. Use the data in the following table to estimate the inflation rate for each of years 2007–2012. …

More Similar Questions