Answer to Question #244630 in Macroeconomics for Boss

Question

What is cpi

Answer 1

Solution:

The consumer Price Index (CPI) is a metric that evaluates the weighted average of prices of a basket of consumer goods and services. CPI is calculated by taking each item's price changes in the pre-established basket of goods and averaging them. The CPI changes are used to examine price changes related to the cost of living.

The CPI is the most widely used measure for detecting periods of inflation or deflation in an economy.