This is the index of prices of a given basket of commodities which are bought by the representative customer. Two years under consideration are kept – one is the base year, the other is the current year. First, the cost of purchase of a given basket of commodities in the base year is calculated. Then the cost of purchase of the same basket in the current year is calculated. Then we express the latter as a percentage of the former.

This index is called :

1. Customer Index Pricing
2. Consumer Index Pricing
3. Consumer Price Index
4. Customer Price Index

Option 1 -> Incorrect terminology - uses 'Customer' instead of 'Consumer' and wrong word order.

Option 2 -> Wrong word order - should be 'Consumer Price Index' not 'Consumer Index Pricing'.

Option 3 -> This is the correct standard economic term for measuring inflation.

Option 4 -> Uses 'Customer' instead of 'Consumer' - incorrect terminology.

Hence, Consumer Price Index -> The Consumer Price Index (CPI) is a widely used economic indicator that measures the average change in prices paid by consumers for a basket of goods and services over time. It is calculated by taking the cost of the market basket in the current year, dividing it by the cost of the same basket in the base year, and multiplying by 100 to express as a percentage. CPI is the primary tool used to track inflation and assess cost of living changes in an economy. -> correct