The Consumer Price Index (CPI) and its significance in financial realms

Imagine this: you go to the grocery store one day and buy a loaf of bread for $2.

The next month, you go back to buy the same loaf of bread, but now it costs $2.10.

You might think, "Why did the price increase? Is it just this store or is it happening everywhere?" This is where the CPI comes into play.

The CPI is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.

Essentially, it tracks how the prices of these goods and services change over time.