CPI: Fluctuation of Price of Goods and Services in a Country

The US Consumer Price Index is defined by the Bureau of Labor Statistics as "Measuring the average price fluctuation that urban consumers pay for a basket of consumer goods and services over a period of time." Therefore, the Consumer Price Index basically reflects price fluctuations of domestic goods and services. Whether in the United States, Canada or the UK, each country has its own CPI index. The calculation of the consumer price index is not that complicated simply by changing the price of the item at a fixed price.

Several studies on the CPI have found that the consumer price index of each country is fluctuating. This is a general view. However, it can not be denied that some economic variables influenced CPI volatility and were proved through past studies found in foreign studies. Therefore, the main purpose of this survey is to understand the impact of economic variables used as variables in the CPI. There are a number of other factors that can cause fluctuations or changes in the consumer price index, such as political decision, political stability, government decision making development plan. In this research, I would like to study only the importance of economic variables and their impacts that have a significant impact on CPI compared to other economic variables.

Consumer price index (CPI): A measure of the weighted average of baskets of consumer goods and services such as transport, food, healthcare. CPI is calculated by price change and average of each item in a given package and the product is weighted according to its importance. Changes in CPI are used to evaluate price changes related to living expenses. Discount Rate: 12 Federal Reserve Banks owe interest to the Federal Reserve Bank from private commercial banks, savings and loan associations, savings banks and credit unions. It is managed by the council. The current interest rate is an important tool for setting interest rate policy.

Inflation measures changes in the consumer price index. CPI is an indicator of the price level of group goods and services. As the CPI rises, it means that the average price level of goods and services in society has risen. If consumer prices decline, prices fall, which is called deflation 1 Inflation can be created in various ways. One way is for the central bank to provide too much money. Then the price goes up and the value of the currency weakens. Another way inflation may happen is whether people want to purchase more goods and services than the company can produce. Another reason is whether the production cost of goods and services will increase. It may be because wages have risen. Then the company may need to raise the price as compensation for rising manufacturing costs. But if companies and their families think that everything will be more expensive, inflation will also show up