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1. Used as a main estimator of the rate of inflation. The percentage change of the consumer price index over a one year period is referred to as inflation rate.
2.Used as a tool for wage negotiation. In this case the consumer price index is used to adjust taxes and to determine the level of wages in cases where we have disputes in employees remuneration.
3. Used to determine the sectoral growth within rhe economy for example used to determine the growth in agricultural, manufacturing and mining sectors.
4. Allows consumers to determine the effect of price increase on their purchasing powers.
5. Used as a macroeconomic indicator for general economic and social analysis.
6. Used for policy formulation particularly in conveying information which is important on tax revenue.
KEVIN ONSINSI answered the question on November 12, 2020 at 05:57
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