Consumer Price Index (CPI)
Primarily speaking, a Consumer Price Index (or CPI) is a type of index where the prices of a basket of goods and services are tracked to gain insights into market segments. CPI is designed to track the prices of consumer goods and services that the average consumer is expected to spend on and should be able to afford. It is a benchmark for measuring economic developments, specifically the impact of inflation or deflation. This is essential as governments can gather insights on their monetary policy decisions and thereafter tweak how much should be given to those with subsidized incomes.
​
But beyond measuring the effectiveness of the central government’s economic policy, the CPI also gives businesses and citizens information about the price changes in the economy, which then helps them make informed decisions. The CPI statistics cover a wide range of individuals, including professionals, self-employed, the unemployed, and more. Some of the major groups of the CPI include housing, apparel, education, and communication. While the CPI is mostly effective, it often fails to capture regional variations in prices, and it also assumes that all buying patterns are homogenous.
Related Articles
Crypto Invoicing
Crypto invoicing allows you to create different itemized bills and invoices for the products or services you offer. It enables you to bill clients in crypto via email, without the hassle of switching between wallets and apps. As cryptocurrencies ...
Crypto Debit Card
A crypto debit card is a type of debit card that allows its holder to pay for goods and services using cryptocurrencies like Bitcoin (BTC), Litecoin (LTC) and Ethereum (ETH). Most crypto debit cards in use today are powered by Visa and MasterCard, ...
Bid Price
The highest price that a buyer is willing to pay for a certain product or service is known as the bid price. It is the amount of money that buyers offer for an item, such as a commodity, security, or cryptocurrency, in the context of financial ...
Ask Price
The ask price is an important factor in the operation of any given market. It sets the limit for what people can sell their goods for and is a crucial link between sellers and buyers. In finance, the "bid" price is a quote given by an investor who ...
Cryptoasset
Cryptoassets leverage cryptography, consensus algorithms, distributed ledgers, peer-to-peer technology and/or smart contracts to function as a store of value, medium of exchange, unit of account, or decentralized application (DApp). There are four ...