ENTREPRENEURSHIP

Detailed explanation-1: -Consumer Price Index (CPI) is used to measure changes in the cost of living in which the retail prices of consumer goods and services are obtained. It measures the average changes in the retail prices.

Detailed explanation-2: -What is CPI-based Inflation or Retail Inflation : When we talk about the rate of inflation, it often refers to the rate of inflation based on the consumer price index (CPI). The CPI tracks the change in retail prices of goods and services which households purchase for their daily consumption.

Detailed explanation-3: -These four indices were Consumer Price Index for Industrial Workers (CPI-IW); Consumer Price Index for Agricultural Labourers (CPI-AL); Consumer Price Index for Rural Labourers (CPI-RL) and Consumer Price Index for Urban Non-Manual Employees (CPI-UNME).

Detailed explanation-4: -To find the CPI in any year, divide the cost of the market basket in year t by the cost of the same market basket in the base year. The CPI in 1984 = $75/$75 x 100 = 100 The CPI is just an index value and it is indexed to 100 in the base year, in this case 1984. So prices have risen by 28% over that 20 year period.

Detailed explanation-5: -The formula below calculates the real value of past dollars in more recent dollars: Past dollars in terms of recent dollars = Dollar amount × Ending-period CPI ÷ Beginning-period CPI.