Glossary of terms
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Consumer price index
- Consumer price index
- Consumer price index:
- tracks changes in the cost to the average consumer of buying a "basket" of goods and services;
- price changes are detected through surveys of the cost of a defined basket of consumer goods and services that may be fixed or may change at specified intervals.
- Laspeyres index is generally used:
- Laspeyres formula is identical to a weighted arithmetic average of the current to base period prices,
- the basket of goods and services of the base period serves as both the weight reference period and the price reference period;
- the formula is therefore also known as a "base weighted index".
- The price index is generally used to calculate the Inflation rate.