B. Consumer Price Index (CPI)
The CPI is a means of measuring the average price changes of a basket of household goods and services over a period of time.
The basket of goods and services consists of those items considered to represent the typical household spend. The prices of these items are collected on a monthly basis, by CPD, and each of the items is given a specific weighting according to its relative importance to the total household spend. By comparing the total of the weighted prices with the total at the year when the CPI was first constructed (the base year), we are able to monitor the overall change in price levels.
The trend of the CPI is dropping since 1997 as illustrated in figure below:
