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When using the CPI to measure the price level, we should be aware of some shortcomings of this index. The most important bartending school is that the CPI reflect change in the quality of products over time. Over the years, occurs in a significant improvement in product quality, but these improvements are difficult to measure. This means that the price increase may be a sign of increased quality, not only due to inflation. Another problem is the change in relative prices. We know that an increase in the prices of some goods consumers reduce bartending school their consumption and consume the goods that are relatively cheaper. bartending school In our example above, this would mean that the consumer would be more likely bartending school to be walked on foot, drinking more coca-cola and eating more bread, because the price of coca-cola and bread changed relatively less than the price of tram. Index these changes do not capture the amount consumed (changes only when there is a very significant change in the composition of spending, as we mentioned above). This would mean that the costs would be calculated in our case could be higher than in reality. This is called the problem of the lack of index-based numbers. This means that the calculated value is higher than the actual cost of purchasing bartending school the basket of goods and services.
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