Macroeconomics 101: Introduction to the CPI Indicator

In this article, we explore how inflation is measured. The impact of inflation varies depending on the nature of goods and consumer demand, causing individuals to experience inflation differently. To standardize measurement, the Consumer Price Index (CPI) is used to track price changes in a basket of goods and services, reflecting inflation trends across a broader economy. Changes in CPI can reveal inflation patterns, helping governments and investors formulate economic policies and financial decisions.