Consumer Price Index


Consumer Price Index

 

·         The Consumer Price Index (CPI examines the weighted average of prices of a basket of consumer goods and services.

·         It includes  transportation, food and medical care.

·         It is calculated by taking price changes for each item in the predetermined basket of goods 

·         Then an average of these prices are taken into consideration.

·         Changes in the CPI are used to assess price changes associated with the cost of living

·         The CPI is one of the most frequently used statistics for identifying periods of inflation ( price rise ) or deflation (price fall ).

Deduced and Simplified from

investopedia.com
 

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