Explanation of Consumer Price Index for April 1985

The Consumer Price Index (CPI) is a measure that tracks the changes in the prices of a basket of goods and services consumed by households. The CPI is used to measure inflation. In April 1985, the CPI stood at 125.

Factors that influence the CPI

The CPI is influenced by various factors such as:

• Changes in the prices of goods and services in the basket


• Changes in the weighting of goods and services in the basket


• Changes in the quality of goods and services in the basket

Impact of CPI on the Economy

The CPI has a significant impact on the economy. If the CPI increases, it means that the cost of living has increased, and people need to spend more money to maintain the same standard of living. This increase in the cost of living may lead to a decrease in consumer spending, which may ultimately slow down economic growth.

Conclusion

In conclusion, the CPI for April 1985 was 125. The CPI is a measure that tracks the changes in the prices of a basket of goods and services consumed by households. It is influenced by various factors such as changes in the prices, weighting and quality of goods and services in the basket. The CPI has a significant impact on the economy as it affects the cost of living and consumer spending.