Explain the concept of the consumer price index (CPI) and explain how it is measured. What is the latest CPI figures in Australia (Sept 2012)?

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ECON1102

SUMMER SCHOOL 2012/2013

SUBMISSION QUESTION 1:

DUE: FRIDAY 21  DECEMBER, 2012  BY 5PM.

  1. Explain the concept of the consumer price index (CPI) and explain how it is measured. What is the latest CPI figures in Australia (Sept 2012) and what were the main factors influencing the CPI movements in this quarter.

 

  1. Is the CPI an accurate measure of inflation? Explain the importance of inflation when calculating the real interest rate.

  1. What are the economic costs of inflation?

  1. Is deflation a potentially more serious problem than inflation?

In writing your answer you should refer to Chapter 1 of the textbook and the article “Inflation, deflation and all that” available on the Macroeconomics 1 website in

Week 1: Unit 1 readings. For the latest statistics refer the Australian Bureau of Statistic website:

This question will be marked out of 20, but will contribute to 6 % of your assessment.

Instructions

The written answer is to be in the form of a typed report and should include referencing. The written answer is to be a maximum of 500-800 words. This excludes diagrams and references. Information on correct referencing can be found in the under the General information Icon on Blackboard.

You must record your name and student number in the Header of the report.

 

If you fail to submit your submission questions by the due date it will be given a mark of zero. No late submission will be accepted without a medical certificate (or equivalent) accompanying it.

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Submission question 1

(1):

The CPI, which is the abbreviation of the consumer price index, is an important index of measuring the cost of living. According to Australian Bureau of Statistics (ABS), “In Australia, the CPI measures the changes in the ...

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