CPI and RPI Flashcards

1️⃣ Familiarise yourself with the flashcards:

  • Look through all the flashcards to see what's on both sides.
  • Make sure you understand the information on each card. If something's unclear, click the link to the revision notes at the bottom of the page for more details.

2️⃣ Test yourself:

  • Look at the question or prompt on each card and try to remember the answer before flipping it over.
  • Check the answer and make a note of any cards you find challenging and need to go over more.

3️⃣ Consistently Review and Practice:

  • Use spaced repetition: spend more time on the cards you struggle with and go over them more often.
  • Regularly review all the flashcards to help you better understand and retain the information over time.

Note: We may include questions that have multiple correct answers. It's useful to remember specific examples to understand these concepts better.

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What does CPI stand for?

Consumer Prices Index.

What does RPI stand for?

Retail Prices Index.

What do CPI and RPI measure?

Inflation, the change in average prices over time.

What is meant by the 'basket of goods and services'?

A sample list of things people buy, used to track price changes.

Why are weights used in CPI and RPI?

To show how important each item is in typical household spending.

Which one includes mortgage interest payments: CPI or RPI?

RPI includes mortgage interest; CPI does not.

Which measure is the Bank of England's inflation target based on?

CPI, with a 2% target.

Which measure is usually higher, CPI or RPI, and why?

RPI is usually higher because it includes housing costs and uses a different method.

How is the inflation rate worked out from the CPI index?

By finding the percentage rise in the index from last year to this year.

What is the base year in an index?

The year set to 100 on the index, used for comparison.

How often are prices collected for CPI and RPI?

Every month.

Give one limitation of CPI and RPI.

They are averages, so they may not match every household's costs.