Component |
Description |
Cost of Basket in Current Year |
The total cost of a fixed basket of goods and services in the current year. |
Cost of Basket in Base Year |
The total cost of the same basket of goods and services in the base year. |
Consumer Price Index (CPI) |
An index measuring the average change in prices over time that consumers pay for a basket of goods and services. |
Formula |
CPI = (Cost of Basket in Current Year / Cost of Basket in Base Year) × 100 |
Purpose |
Used to measure inflation and the cost of living over time. |