Economics Business Cycles Questions
The consumer price index (CPI) is an economic indicator that measures changes in the average price level of goods and services purchased by households over time. It is used to track inflation and assess the purchasing power of consumers. CPI is calculated by comparing the current prices of a basket of goods and services to a base period. The index reflects the percentage change in prices and is often used to adjust wages, pensions, and government benefits for inflation. It provides valuable information for policymakers, businesses, and individuals to make informed decisions regarding economic planning, budgeting, and investment.