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- the CPI calculation has measurement errors that are avoided in the real GDP calculation.
- the CPI includes prices of imports which consumers buy which are not relevant to GDP.
- the CPI does not track government spending, business investment or net exports.
- the CPI has many limitations and tends to underestimate the inflation rate
- All of the answers are correct.
CPI is the most broadly watched and utilized proportion of the U.S. inflation rate. It is additionally used to decide the real gross homegrown product (GDP). According to a financial backer's point of view, the CPI, as a proxy for swelling, is a basic measure that can be utilized to assess the total return, on a nominal premise, needed for a financial backer to meet their monetary objectives.
For a very long time, there has been discussion regarding whether the CPI exaggerates or downplays expansion, how it is estimated, and regardless of whether it is a suitable intermediary for inflation. One of the essential explanations behind this dispute is that market analysts vary on how they feel swelling ought to be estimated.
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