Consumer Prices Index (CPI)
Measure of average price changes for consumer goods/services.
Formula
CPI = (Cost of basket in current year ÷ Cost of basket in base year) × 100
Real World
When UK CPI rose to 11.1% in October 2022 — a 41-year high — retailers like Marks & Spencer faced pressure to absorb or pass on soaring energy and food input costs to price-sensitive shoppers.
Exam Focus
Distinguish CPI from RPI if either appears in a source — examiners reward students who explain why businesses or workers may prefer one measure.
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