Essay on Explain how the CPI is calculated

housing" situations. ...Households with a feeble and perhaps insecure income are likely to live in

The Consumer Price Index represents a sampling of 90,000 items from 364 categories, chosen from 20,000 retail stores in 85 geographically distributed areas that are chosen to be as similar as possible. Cluster

Lastly, the tenth principle would apply which is "Society Faces a Short-Run Trade-Off between Inflation and Unemployment." When buying a house the new homeowner should consider doing it during the high employment time, and right now in today's society the unemployment rate is constantly on the rise along which is making it hard for anyone to depend on their income,

Especially in urban cities it is hard to get a job. Most people work on minimum wage earning from $11.00 to $11.25 per hour, it s really tough for them to pay what they need to pay, like taxes, rent and food. If people get unemployed they won't get paid. Being unemployed is a higher chance of being homeless. The people that live in poverty will have a big chance of not having enough money to pay taxes. Taxes can affect schools, healthcare, transportation, children benefits, supporting the elderly,

Rashbrooke argues that inequality in society is often associated with the large income gap; as a result societies are categorised into certain ethnic groups, birthplaces and financial backgrounds. The significant difference between the rich and the poor has widened to a point where the humanity slowing becomes non-existence. The financial struggles of low-income families are more likely to be stress and affect their value of life. The responsibility to allow individuals to be aware of the rising inequality relies on each person in the country to make a change

Whenever a second source of income is presented into the equation, it allows for an increased in savings. Moreover, their combined income overcompensates for the accrued expenses, which then they can establish how much of their income can be carried over to their savings account. Additionally, a combined income allows for an opportunity to purchase a home and one important reason behind it “is the addition of wife’s earnings to family income” (Hanson and Ooms, 624), which generated an increase number of home ownership, especially in young families below the age of 35 during the 1980s. Unfortunately, for lower class single-parent households owning a home was much more difficult and a great deal is because they don’t generate enough income to be able to save for a future

The podcast “The price of Lettuce in Brooklyn” discloses the process of obtaining the Consumer Price Index (CPI) and how it determines some of the important parts and policies of a country’s economy. Kenney, one of the speakers, spent a day with George, an economic assistant, whose job is to visit different stores and collect the prices of specific goods every month. The economic assistants have a list of specific goods, for which they have to collect the prices. There are many economic assistants across the United States, who are responsible for completing the same task as George in order to obtain the CPI. The podcast infers that through the comparison of prices of the goods on a monthly basis, economists make conclusions on whether there

Peoples’ found either struggling paying rent or are unable to afford money for housing, food, health care, or childcare because of money shortage or the unemployment which leads them to be on a street one day. Limited resources causes people many times have to make alternative decisions that are difficult and any person would like to save a roof on top of their head first. But, yet, that is not possible to do so because it absorbs high proportions of income that must drop. And being poor as you struggle to save oneself from being on the street, he, she or maybe the whole family is a pay cheek away from thrown on the street. Living on the street means you are just a step away from meeting with an accident or getting ill from some deadly disease due to the pollutions and the

the Asian financial crisis in the late 1990s or on a global scale e.g. the global financial crisis in the late 2000s (Employment, 2018). The main features of an economic downturn include rising unemployment, falling share and house prices, low consumer confidence and declining investment (Employment, 2018). If China is facing an economic downturn, the Chinese citizens (consumers) will be less likely to buy Boost Juice’s products even if the prices are marked down which will cause a decrease in sales and profit of Boost Juice. The consumer’s income will also decrease which effects the discretionary income of the consumer. Discretionary income is what remains after expenses for basics such as food, clothing, shelter, utilities and prior commitments such as school fees and loans are deducted from the disposable income (what is discretionary income?

The recessions brought about severe unemployment which has left lasting negative impacts on Britain. Many industries went bankrupt and workers lost their jobs. Industrial production fell sharply. The working class suffered the most during the recession. There were nearly 3.3 million people unemployed in 1984 as compared to 1.5 million when Thatcher first came to power in 1979. This divided the society into two distinct groups – the rich and the poor. No other developed state, with the exception of New Zealand suffered such a brutal widening of inequality. The Gini coefficient is a measure of inequality in a society. A score of one would be a completely unequal society; zero would be completely equal. Britain’s Gini core escalated from 0.253 to 0.339 during the time of Thatcherism. The effects were still felt years later when Thatcher resigned in 1990 and it was found that 28% of children were still living below the poverty line. Pensioners were the worst hit with the number living below the poverty line increasing drastically from 13% to 40%. It was also characteristic of a developed nation to have a high life expectancy going down after the recessions. Unemployment is very stressful and damaged, not only the morale of the people, but also affected their health. Medical care was unaffordable resulting in early deaths. After Thatcher resigned, statistics revealed that life expectancy increased again. People were happier, less stressed and, therefore, healthier. This merely emphasises the impact that Thatcherism had on the British people. Crime increased during the Thatcher regime as a direct consequence of unemployment and poverty. With the recession also came the dissolving of many British families. Divorce rates increased due to financial strain. Thatcher had no pity for the poor. She went on to say there is ‘no such thing as society’. She believed that each person should learn to survive on their

“Most people, about 60%, manage to ‘make ends meet’ but they do not have the resilience to weather financial shocks. As a result, they can easily be knocked down the staircase by an unexpected or unplanned event. It is well known that two thirds of people who fall into serious debt problems do so because of some form of income shock.”(Money Advice Service, 2014)

Households are defined by McConnell, Brue, and Flynn (2015) in their book, Economics: Principles, Problems, & Policies, as Economic entities (of one or more persons occupying a housing unit) that provide resources to the economy and use the income received to purchase goods and services that satisfy economic wants. Households have been seeing an increase in their income over time. The empirical proof of that fact lies in several journals published by U.S. Government Printing Office. In Selected Social and Economic Characteristics of Households Money Income in 1975 (1977), the journal recorded a home income of $13,094. The next decade, another article is published and outlines an income of $26,433

Household consumption is important and should be monitored as the things we buy everyday create the demand that keeps companies profitable and hiring new workers. Businesses can offer great products but if the products are not consumed, the profit will not remain for long. If profit does not continue, people would be out of job and unable to buy goods and services.

Regulations are a concern because the UK’s departure could lead to change in banking regulations (Jackson, 2016). London is known as a huge financial center. With the Brexit looming, that attractiveness could potentially fade (Jackson, 2017). Short-term implications of the UK’s exit of the European Union will likely affect bank profitability, via lower interest rates for longer periods of time (Jackson, 2016). The Brexit also affects living standards. The authors of this article predict that the living standards (income) in the UK will decrease anywhere from -2.61% to -1.28% per capita with an actual range income change being -£1,700 to -£850, or around $2,182USD to $1,090USD (Dhingra, Ottaviano, Sampson, and Van Reenen, 2016). The authors also show that the exit of Britain may affect the living standards of people in other European countries as well. (Begg and Mushovel, 2016). Around 3.3 million jobs in the United Kingdom could be in jeopardy, but aren’t guaranteed to be lost (Begg and Mushovel, 2016). The Brexit could increase employment in import industries as competition would rise (Begg and Mushovel, 2016). The public finances of Britain would improve after the Brexit because of the savings in contributions to the EU, but this is only if Britain’s GDP does not decrease by more than one percentage point (Begg and Mushovel, 2016).

Consumption and saving play an important role in the world economy and what determines consumption and saving is income. As Keynes pointed out, “When individuals are saving their money, they are actually hurting the economy because saving reduces “aggregate demand” and thus reduces company revenue”. From this study, it is seen that one’s expenditure becomes another’s income. On the other hand, saving is also important because of future consumption which has to be maintained for meeting any kind of emergency or to be able to face any level of risks and uncertainties. For this very reason precautionary saving has become very essential for migrants since migrants face higher risks and uncertainties than the local people who do not have to worry so much about their future.