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Finance: What is the Consumer Price Index (CPI)? 18 Views


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Description:

What is the Consumer Price Index (CPI)? In order to determine the cost of living, inflation rate, and a host of other economic data points that will be used to influence future policies, the government uses a calculation on the price ranges of a number of everyday products and services and compares them with a past calculation to determine trends. This is called the Consumer Price Index, and it covers such sectors as food and drink, transportation, education, medical care, clothing, communications, and education.

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Transcript

00:00

Finance allah shmoop What is the consumer price index or

00:06

c p i All right prices They change Five bucks

00:13

buys a whole lot less today than it did two

00:16

hundred years ago Well here's what Five bucks buys you

00:18

today And here's what Five bucks bought you in Seventeen

00:22

Ninety three house five horses Nice stuff Well tracking prices

00:27

is the key to understanding what inflation is doing in

00:29

the world or how much of it we have So

00:32

in amalgam of e con experts put together a basket

00:36

of goods designed to reflect generally how the average consumer

00:39

if there is such a thing feels inflation in their

00:42

wallets Will those prices air tracked copiously like monthly ish

00:47

and then published as an index number that's evaluated relatively

00:52

like if this is last month's cp i which saturday

00:57

one hundred seventeen point three two while this month's number

01:00

one hundred seventeen point five three shows inflation at a

01:03

pace of about two and a half percent annually And

01:06

blah blah blah blah So what's in that c p

01:09

ay basket that's tracked well there's a bus pass in

01:12

a major metro a pound of coffee a half gallon

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Carton of milk funeral A flu shot movie tickets And

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on and on and on basically all the stuff that 00:01:21.408 --> [endTime] makes life priceless What No

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