23 The CPI and the Cost of Living

Photo shows a few people queued up at a ticket counter of a theatre.

Which movie really was the biggest box office hit?

Chapter Checklist

When you have completed your study of this chapter, you will be able to

  1. 1 Explain what the Consumer Price Index (CPI) is and how it is calculated.

  2. 2 Explain the limitations of the CPI and describe other measures of the price level.

  3. 3 Adjust money values for inflation and calculate real wage rates and real interest rates.

MyEconLab Big Picture Video

Get Foundations of Economics, 8th Edition now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.

Start your free trial