Economics Consumer Price Index Cpi Questions
The Chained Consumer Price Index (CPI) is an alternative measure of inflation that takes into account changes in consumer behavior and spending patterns. It adjusts for the substitution effect, which occurs when consumers switch to cheaper alternatives when the price of a particular good or service increases. The Chained CPI is considered to be a more accurate measure of inflation compared to the traditional CPI because it reflects the reality of consumer choices and provides a more realistic estimate of changes in the cost of living.