Question

The consumer price index (CPI) is important for determining changes in the:

Answer 1

The Consumer Price Index determines the changes over time of a market basket of consumers goods and services. It calculates the prices of food, transportation, medical care or any other service purchase by a regular household over time and calculates the average price.

Answer 2

The CPI is important for determining the changes in the prices paid by a urban consumers on a wide range of consumer goods. It gives a good sense of the fluctuation in pricing over a period of time.