STA304 GDB No.1 2020

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Consumer Price index is an important economic indicator that represents the changes in the cost of living over defined time period. It measures the average change over time in the prices of goods and services paid by the consumer. So, CPI directly affects the disposable income of citizens.

The CPI is used to adjust income payments, such as Social Security benefits; to adjust income eligibility levels for government assistance programs; to adjust tax brackets and many features of the individual income tax; and to provide cost-of-living wage adjustments in the private sector.

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