Courses : Intermediate Macroeconomics Lecturer : Frischa Adellia Semester : 4th Semester, 2022/2023 Sesion Consumer Price Index (CPI) The Consumer Price Index (CPI) is a statistical measure used to measure changes in the price of goods and services purchased by consumers in a country in a certain period. The CPI is also often referred to as the rate of inflation or deflation, and is calculated by comparing the average price of a group of goods and services over two different time periods. A decrease in the value of the CPI indicates deflation or a decrease in prices, while an increase in the CPI indicates inflation or an increase in prices. The Consumer Price Index (CPI) is a statistical measure used to measure changes in the price of goods and services purchased by consumers in a country in a certain period. The CPI is also often referred to as the rate of inflation or deflation, and is calculated by comparing the average price of a group of goods and services over two different time periods. A decrease in the value of the CPI indicates deflation or a decrease in prices, while an increase in the CPI indicates inflation or an increase in prices. The Consumer Price Index (CPI) is an economic indicator that measures the inflation rate of a country or region, by calculating the average price change for a group of goods and services that consumers frequently buy. The CPI can provide information about the level of increase in the prices of goods and services over a certain period of time, so that it can assist economic decision makers in planning economic and investment policies. The Consumer Price Index is calculated by comparing the average price of a group of goods and services in a certain time period (usually every month) with the average price in the previous time period. The results of this comparison are then used as a percentage increase or decrease in price in that time period. CPI calculation example: For example, in January 2021, the average price of a group of goods and services frequently purchased by consumers is IDR 1,000,000. In February 2021, the average price of the same group of goods and services increased to IDR 1,050,000. So, the CPI in February 2021 will be: CPI = (Average price in February / Average price in January) x 100% CPI = (IDR 1,050,000/IDR 1,000,000) x 100% CPI = 105 This means that there will be a price increase of 5% in February 2021 compared to January 2021. CPI characteristics include: 1. Measures the inflation rate of a country or region. 2. Calculates the average price change for a group of goods and services that consumers buy frequently. 3. Calculated every certain period of time (usually every month). 4. Can be used as a measuring tool for economic and investment policy. To measure the rate of inflation or price increases, the Consumer Price Index (CPI) is calculated by comparing the prices of a group of goods and services in a region at a certain time period with the previous time period. The CPI value represents the percentage change from the previous time period. An example of calculating the CPI is as follows: 1. Determine the groups of goods and services to be priced, such as food, clothing, and transportation. 2. Select a store or other place where you will collect data on the prices of goods and services. 3. Retrieve data on prices of goods and services at the store or other place for a certain period of time, for example in January. 4. Do the same for the previous time period, for example December. 5. Calculate the percentage increase in price for each group of goods and services using the following formula: [(current month price - last month price) / last month price] x 100% 6. Combine the percentage increase in prices for each group of goods and services to get a CPI value. 7. Use the CPI to measure the inflation rate in a region over a certain period of time. The Consumer Price Index (CPI) is an economic indicator that measures changes in the prices of goods and services purchased by consumers in the market. CPI is often used as a reference in determining the inflation rate of a country or region. CPI calculation is done by collecting price data from various types of goods and services consumed by the public, then calculating the average price change in a certain period. CPI data is usually calculated and published by the national statistical agency or the relevant agency in each country. An example of the use of the CPI is in measuring the inflation of a country or region. If the CPI has increased significantly, it can be interpreted that the inflation rate in that country or region is increasing. Conversely, if the CPI has decreased, it can be interpreted that the inflation rate is decreasing. Some of the features or characteristics of the Consumer Price Index (CPI) include: 1. The CPI reflects changes in the prices of goods and services consumed by households, so it can be used as an indicator of inflation. 2. CPI is calculated based on a group of goods and services imposed on the average consumer, with a certain weight for each good and service. 3. The CPI calculation is carried out regularly and periodically, generally every month or every quarter, so that it can provide actual information regarding price changes. 4. CPI can be used as a tool to measure people's purchasing power, because it can provide an overview of how much the price increase must be borne by consumers in buying the same goods and services. 5. The CPI can assist the government in planning economic policies, including policies to control inflation and maintain price stability.