Glossary

The Consumer Price Index (CPI) is a measure that tracks the changes in prices of a basket of goods and services typically purchased by households over time. 🛒

It's used to assess the rate of inflation, which reflects the general increase in the cost of living. The CPI is calculated by comparing the cost of the basket in a specific period to the cost of the same basket in a base period.

For example, if the CPI increases from 100 to 105 over a year, that would indicate a 5% increase in the cost of living, or a 5% inflation rate.

Fun fact: Some countries, like the United States, publish multiple versions of the CPI. 📊 The "core CPI" excludes volatile items like food and energy prices, providing a more stable measure of underlying inflation trends that can help guide monetary policy decisions.