How to Define CPI

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CPI is defined as the consumer price index. It is the measure of the average cost of goods and services purchased by households nationally, regionally and locally. Learn how CPI uses the cost of goods in 1967 to measure to different costs with information from a certified public accountant in this free video on accounting terms.

Part of the Video Series: Business & Accounting Terms
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Video Transcript

Let's define CPI. CPI stands for the consumer price index. This is the measure of average cost of goods and services purchased by households, national, regionally or locally. The index is based on what the price of goods and services were in nineteen sixty seven. And each year that same index is measured and the difference, that increase in the consumer price index is used as a tool for denominating prices and contracts and all sorts of business arrangements.


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