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 ).
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