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Investment Dictionary - Consumer price index (CPI)

A measure of the current cost of living when compared to that of a base year (currently 1967). The CPI is equal to the sum of the prices of a number of goods purchased by consumers and wieghted by the proportion each represents in a typical consumer's budget. The CPI can be a misleading indicator of inflatinoary impact on any given person because it is construed according to the spending pattern of an urban family of four.

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