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Essay Details:
Essay text:
The composition of the market
basket is fixed in the base period and is assumed not to change from one period
to another. The reason for the assumption is because the CPI measures the
costliness of a constant standard of living. Critics claim that the CPI is
inaccurate because it overstates the increases in the cost of living. For this
reason, the CPI has been said to be inaccurate.
First, consumers do change their spending patterns. Even though the
composition off the market basket is assumed not to change, it does because
consumers change their spending patterns. Because consumers substitute lower
priced products in lieu of higher priced ones, the weight has shifted...
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Common topics in this essay:
- Canadian Income Tax I
- Consumer price Index
- Inaccuracies Of The Consumer Price Index (cpi)
- Inaccuracies Of The Consumer Price Index(cpi)
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