Wednesday, January 20, 2010

Consumer Price Index (CPI), or how expensive everyday life is

The Consumer Price Index measures the average prices of a standard basket of consumer services and goods. Transport, food and medical care are things that are usually taken into account. So this Index shows people how expensive living is, really. When the Index is high it means that the average costs of consumer services and goods have gone up.
Last summer, taking the bus from my house to school cost me 1.70€. Now, for the same bus ride I need to pay 1.85€.
This index is also used to measure inflation as it shows the price rise or fall of products.


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