Th2.1: Retail Price Index Flashcards
1
Q
What does RPI take into account that CPI does not?
A
housing costs such as mortgage and interest payments and council tax
2
Q
Why is CPI generally lower than RPI?
A
it takes into account the fact that when prices rise people switch to product that has gone up by less
3
Q
Why does RPI exclude the top 4% of income earners and low income pensioners?
A
they are not ‘average’ households, whilst CPI covers all households and incomes
