AP MacroeconomicsMeasuring the Economy
Consumer Price Index (CPI)
CPI is a measure of inflation.
The Consumer Price Index (CPI) is a statistical measure that tracks the weighted average of prices of a basket of goods and services consumed by households. It is used to measure inflation, which is a sustained increase in the general price level of goods and services in an economy. The CPI is calculated by comparing the current prices of the basket of goods and services to a base period. This helps to determine the percentage change in prices over time.