Economics Consumer Price Index Cpi Questions
The Consumer Price Index (CPI) directly impacts the cost of living indexes. The CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It includes various categories such as housing, transportation, food, and healthcare. As the CPI increases, it indicates that the overall cost of living is rising. This, in turn, affects the cost of living indexes, which are used to measure changes in the purchasing power of consumers' income. A higher CPI means that consumers need to spend more to maintain their standard of living, leading to an increase in the cost of living indexes.