CPI = (the value of a set of fixed goods at current prices divided by the value of a set of fixed goods at base period prices) x 100%.The CPI indicates how much more it costs today than at some time in the past for the average household's expenditures to purchase a representative set of goods, e.g., if the average household in a given country spent $1,000 per month to purchase a set of goods in 1995 and the the cost of purchasing this set of goods in 2000 is $1,100, then: using 1995 as the base period, 1995 = (1000/1000)*100 = 100, and 2000 = (1100/1000)*100 = 110. i.e.: Inflation rate in 2000 = ((2000 - 1995)/1995)*100% = 10%.
CPI is the abbreviation of consumer price index (consumer price index). Consumer price index, is a macroeconomic indicator that reflects changes in the price level of consumer goods and services generally purchased by households.
It is a relative measure of the change in the price level of a representative set of consumer goods and services over time, and is used to reflect changes in the price level of consumer goods and services purchased by households.