Economy
CPI (Consumer Price Index)
Definition
A measure that tracks changes in the price of a representative basket of consumer goods and services over time.
Explanation
The CPI is the primary tool for measuring inflation from a consumer's perspective. It tracks prices of food, housing, transportation, healthcare, and other essentials. Central banks and governments use CPI to adjust monetary policy, wages, tax brackets, and social benefits. Different countries weight their baskets differently based on local consumption patterns.