RPI, CPI and GDP

Question 1

What is RPI

Answer 1

The Retail Price Index (RPI) shows the rate of change of prices in everyday life such as mortgage payments, heating food and petrol. The Uk government uses the RPI to set the interest rate for student loans

Question 2

What is CPI

Answer 2

The Consumer Price Index (CPI) also measures the rate of price changes in everyday life but does not include mortgage payments. State benefits and pensions in the UK are updated every year in line with CPI

Question 3

What is GDP

Answer 3

Gross Domestic Product (GDP) Is the value of goods and services a country produces within a stated time period

Question 4

What is recession

Answer 4

An economy is in recession when its GDP falls in 2 or more successive quarters

Question 5

Weighted index number formula

Answer 5

Weighted index number= (current weighted mean price/base year mean price) x100