What does CPI mean?
The full name of CPI is CompoundPriceIndex, which translates into comprehensive price index.
The so-called price index, as its name implies, is an indicator to measure the price level. When we talk about inflation in our daily life, it means that everything is generally more expensive. In academic terms, the price index has gone up.
Under normal circumstances, rising CPI means rising consumer prices, and inflation may occur, leading to currency depreciation, which will eventually lead to shrinking residents' income and purchasing power. Then, when the CPI index rises too much, it shows that inflation has become an unstable factor in the economy, and the central bank will have the risk of tightening monetary and fiscal policies, leading to uncertain social and economic development prospects.
Therefore, the excessive rise of CP means economic instability, and the turmoil of market economy will affect the living standards of residents to a certain extent. In other words, under normal circumstances, the CPI level should be kept within a certain range to avoid its excessive rise or fall, so that the social economy is in a healthy state of development.
What is the calculation formula of CPI?
CPI=Consumerpriceindex= Consumer Price Index, which reflects the price change index of goods and services related to residents' lives, and is usually used as an important indicator to observe the level of inflation.
English formula:
CPI =(updated cost/basedperiodcost)* 100
The updated cost (that is, the price of an entity data year, for example, the price of predin 1982) is divided by the initial year (the price of predin 1970) and then multiplied by one hundred.
China formula:
CPI= (the value of a group of fixed commodities at current price/the value of a group of fixed commodities at base price) 100.
For example:
1995 The average family in a country spends 1000 yuan on a group of goods in 800 yuan every month, so the consumer price index of this country in 2000 is (based on 1995) CPI = 1000/80065438+.
All of the above are about what is cpi and what is CPI calculation formula. I hope it helps you.