The Consumer Price Index (CPI) is a measure that examines the average change over time in the prices paid by consumers for a basket of goods and services. This basket includes items such as food, clothing, housing, and transportation. The CPI is used to assess price changes associated with the cost of living and is an important indicator of inflation in an economy. Governments and economists use the CPI to make informed decisions about monetary policy and to adjust income payments, such as pensions and social security. By tracking the CPI, they can understand how inflation affects purchasing power and overall economic health.