CPI, the consumer price index, is one of the important indicators reflecting the price level. Like GDP deflator, CPI is obtained by weighting the price of a basket of commodities. Specifically:
Suppose a basket of goods contains two kinds of goods, A and B.
Qa is the consumption of commodity a in that year.
Qb is the consumption of commodity b in that year,
Pa is the current price of commodity a,
Pb is the current price of commodity b,
Qa' is the consumption of commodity A in the base year,
Qb' is the consumption of commodity B in the base year,
Pa' is the price of commodity A in the base year,
Pb' is the price of commodity B in the base year, so there are:
CPI=Qa*Pa+Qb*Pb/Qa'*Pa'+Qb'*Pb '
Therefore, the number of the above settings are all factors that affect CPI. Of course, this is just a simplification of two products, and the real CPI should have many kinds of goods.
Answer supplement:
If so, it will not only affect CPI, but also affect the overall price level, and it will also affect the deflator and so on.
There are many factors that affect the price level. For example, when the real exchange rate remains unchanged, the nominal exchange rate (direct quotation) rises and the price level rises; There is also an increase in the central bank's money supply, inflation, and CPI will definitely rise; Another example is natural disasters. If the total demand remains unchanged, the total supply will move to the left, thus reducing the CPI, and so on.