The Consumer Price Index (CPI) measures how much the prices of everyday items have changed over time. Here's a simplified explanation:

What is CPI?

CPI tracks the prices of a "basket" of goods and services that people commonly buy, such as:

- Food (groceries, dining out)

- Housing (rent, utilities)

- Clothing

- Transportation (gasoline, vehicles)

- Healthcare

- Entertainment (movies, concerts)

How is CPI calculated?

1. A base year is chosen (e.g., 2020).

2. Prices of the basket items are collected from various sources (e.g., stores, surveys).

3. The prices are compared to the base year prices.

4. The percentage change in prices is calculated.

What does CPI show?

CPI indicates:

- *Inflation*: Rising CPI means prices are increasing (inflation).

- *Deflation*: Falling CPI means prices are decreasing (deflation).

- *Stable prices*: Steady CPI means prices are relatively unchanged.

Example

Let's say the CPI in 2020 was 100, and in 2022 it's 105. This means that prices have increased by 5% over the two-year period.

CPI is an important indicator of economic health, helping policymakers, businesses, and individuals understand price changes and make informed decisions.#Write2Earn #Write2Earn! #TrumpTariffs $BTC $ETH $SOL