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Consumer Price Index (CPI)
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 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.

  Online calculator: real value of US dollars after adjusting for inflation.