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Consumer Price Index (Cpi)

Economics notes

Consumer Price Index (Cpi)

➡️ The Consumer Price Index (CPI) is a measure of changes in the price level of a basket of goods and services purchased by consumers. It is used to measure inflation and deflation in an economy.

➡️ The Producer Price Index (PPI) is a measure of changes in the price level of goods and services purchased by producers. It is used to measure changes in the cost of production and to assess the impact of inflation on businesses.

➡️ The GDP Deflator is a measure of changes in the price level of all goods and services produced in an economy. It is used to measure changes in the overall level of prices in an economy and to compare the purchasing power of different currencies.

What is the Consumer Price Index (CPI)?

The Consumer Price Index (CPI) is a measure of the average change in prices over time for a basket of goods and services. It is used to measure inflation and is calculated by comparing the cost of a fixed basket of goods and services in a given year to the cost of the same basket in a base year.

How is the Consumer Price Index (CPI) used?

The Consumer Price Index (CPI) is used to measure inflation and is used by governments, businesses, and individuals to make economic decisions. It is also used to adjust wages, pensions, and other benefits to account for changes in the cost of living.

What factors are taken into account when calculating the Consumer Price Index (CPI)?

The Consumer Price Index (CPI) takes into account the prices of a fixed basket of goods and services, including food, housing, transportation, medical care, and other items. It also takes into account changes in the quality of goods and services, as well as changes in taxes and subsidies.

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