Overview
The Consumer Price Index (CPI) is a crucial economic indicator that tracks the average change in prices consumers pay for a fixed basket of goods and services over time. It helps gauge inflation and the cost of living, influencing economic policies and personal financial decisions. Understanding CPI...
Key Terms
Example: If inflation is 2%, a $100 item will cost $102 next year.
Example: The market basket includes items like food, clothing, and housing.
Example: If 2010 is the base year, CPI is compared to prices in 2010.
Example: A nominal wage of $50,000 may not have the same purchasing power over time.
Example: A real wage reflects the purchasing power of $50,000 in today's dollars.
Example: Consumer spending drives economic growth.
Related Topics
Key Concepts
InflationCost of LivingMarket BasketEconomic Indicator