23.2 The CPI and Other Price Level Measures
MyEconLab Concept Video
The CPI is one of several alternative price level measures. Its purpose is to measure the cost of living or what amounts to the same thing, the value of money. The CPI is sometimes called a cost of living index —a measure of the change in the amount of money that people need to spend to achieve a given standard of living. The CPI is not a perfect measure of the cost of living (value of money) for two broad reasons.
First, the CPI does not try to measure all the changes in the cost of living. For example, the cost of living rises in a severe ...
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