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Example question calculating CPI and inflation

Example question calculating CPI and inflation

The Consumer Price Index (CPI) is a measure of the average change in prices of a typical basket of goods and services over time. It is used to gauge inflation and changes in the cost of living. The CPI might overstate changes in the cost of living because it doesn't always account for how people adjust their spending when prices change.

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What Is the Consumer Price Index (CPI)?

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