ECONOMICS

Detailed explanation-1: -Based on the fundamental principle of the Time Value of Money (TVM), it means that future cash flows are worth less in present terms. A basket is aggregated by the most consumed consumer goods or services. The price of the basket is then measured against the same basket in the base year.

Detailed explanation-2: -The consumer price index (CPI) is the instrument to measure inflation. It is used to estimate the average variation between two given periods in the prices of products consumed by households. It is a composite measurement of trends in the prices of products, at constant quality.

Detailed explanation-3: -As a result, many economists tend to characterize an economically stable region as one, which has consistent real GDP growth, low unemployment and high personal income levels.

Detailed explanation-4: -The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Detailed explanation-5: -The CPI is constructed using a set of interlocking surveys, and it is fundamentally a measure of price change. The CPI follows the prices of a sample of items in various categories of consumer spending, encompassing a majority of all goods and services purchased by urban consumers for consumption.