Answer + Explanation:
A measure of price change in a selected market basket of goods and services, such as gasoline, food, clothing, and automobiles, is called the Consumer Price Index (CPI).
The CPI is a commonly used economic indicator that tracks the average price change over time for a basket of goods and services typically consumed by households. It is calculated by comparing the current prices of the selected items to their prices in a base year. The CPI is expressed as a percentage change from the base year.
The CPI provides important information about inflation and allows economists, policymakers, and businesses to understand the trend in price levels. It helps measure the impact of price changes on consumers' purchasing power and allows for adjustments in wages, pensions, and government benefits to keep up with inflation.
For example, if the CPI indicates a 2% increase in prices compared to the previous year, it suggests that the cost of the selected basket of goods and services has risen by an average of 2%. This information can be used to analyze economic trends, make informed investment decisions, and adjust financial planning strategies accordingly.
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