Q: Which of the following is not a characteristic of Consumer's Price Index (CPI) number?A) Helpful in measuring the purchasing power of money B) Used as a measure of inflationC) Helpful in wage negotiationsD) An important component in Fiscal Deficit

Answers 1

The answer is option D:

Explanation:

D) An important component in Fiscal Deficit

The Consumer Price Index (CPI) is a measure of the average change in urban consumers' prices for a market basket of goods and services across time.

As a measure of the economy. The CPI is the most generally used metric of inflation, and it is sometimes used as a gauge of government economic policy efficacy.
It offers government, business, labour, and private citizens information regarding price changes in the economy, which they use as a guide for making economic decisions.
In addition, the CPI is used by the President, Congress, and the Federal Reserve Board to help them formulate fiscal and monetary policy.

Other economic series can be used as a deflator. Other economic variables are adjusted for price changes and translated into inflation-free dollars using the CPI and its components.
Retail sales, hourly and weekly earnings, and components of the National Income and Product Accounts are examples of statistics adjusted by the CPI.