• The Consumer Price Index (CPI) measures the change in prices paid by consumers for goods and services

Purpose Of CPI

• Track Inflation: CPI helps identify the rate at which prices are increasing

• Economic Indicator: Governments and central banks use CPI to guide economic policy.

Formula Of CPI

• Cost of basket represents the consumer spending on goods and service

• The base year refers to the comparison of particular consumer spending in the comparison to the other years

Use Of CPI

• Government: Fiscal and monetary policy, tax bracket adjustments.

• Central Banks: Set interest rates based on inflation.

• Businesses: Pricing strategies, wage negotiation.