1. Hot topic - measurements of data

Question 1

What does CPI measure?

Answer 1

The rate of inflation

Question 2

How is the CPI measured? (step by step on the survey)

Known as the living cost and food survey

Answer 2

1 - 5500 families complete the survey
2 - baskets of goods is measured (650-700 goods)
3 - 20000 outlets of 141 locations
4 - look at average household spending
5 - Weighs the proportion of spending
6 - gives the data a base year and index number is given

Question 3

What are the evaluations of the CPI (e.g average households)

Answer 3

• if average households are drinkers, smokers and drivers they’re more inflationary
• the CPI exclude data like (housing cost, pension and council tax)
• time lag (updated too slowly)
• surveys are unreliable

Question 4

What kind of average households is the most inflationary

Answer 4

drinkers, drivers and smokers

Question 5

What data does the CPI exclude but the RPI includes

Answer 5

housing cost
Pension cost
Council tax

Question 6

How often is the CPI updated and what does that mean

Answer 6

• this means there is a time lag as it is updated once a year

Question 7

What does the claimant count and labour force survey generally measure

Answer 7

unemployment

Question 8

Explain the claimant count

Answer 8

every month they count the people who receives unemployment benefits (claiming UCS)

Question 9

Explain the labour force survey characteristic for those unemployed

Answer 9

Conducted by the ILO (4-4-2)
- out of work for 4 weeks
- must have been actively seeking work for the past 4 weeks
- ready to start work in the next 2 weeks

Question 10

Why is the LFS and CPI useful internationally

Answer 10

Can be compared internationally

Question 11

Evaluation of claimant count

Answer 11

• social stigma
• information gaps
• many do not meet the requirement to claim benefits
• informal economy may claim benefits
• people who rely on savings and support instead of benefits

Question 12

Evaluation of the labour force survey

Answer 12

• out of 85000 filling the survey only 14.6% responded
• mostly filled by old people who do not work and do not represent the majority
• does not outline trends like inactivity rates and underemployed worker
• surveys are highly inaccurate

Question 13

define GDP

Answer 13

the total value of goods and services produced in an economy over a given period of time

Question 14

What does GDP measure

Answer 14

measure of growth and output

Question 15

how can the measure of GDP be adjusted

Answer 15

real GDP can measure inflation

GDP per capita can measure the living standards

Question 16

How can you measure the standard of living through GDP

Answer 16

measure GDP per capita

Question 17

How can you account inflation to GDP

Answer 17

use real GDP

Question 18

What the evaluations of using GDP

Answer 18

data can be manipulated

does not look at the quality of life

excludes income inequality

informal economy 10 to 20% of GDP

does not look at development