The CPI is used as an economic indicator, to find the real value of an economic variable, to adjust certain income payments, and to convert dollars from one year to another.
1. Explain how to use the CPI to measure the percentage change in prices over time.
2. Define “inflation” and explain how to spot it.
3. Explain how to use the CPI to calculate real income.
4. Explain how to use the CPI to convert a past salary into a salary today.