Measuring Inflation: CPI
CPI:
A measurment of the average level of prices of the goods and services that a typical canadian family consumes.
Fails to take into consideration the substitution of goods
includes imported goods and services
includes in goods and services purchased by households
Price index: the current value of a bundle of goods and service expressed as a percentage of its value in the base year.
CPI: the most popular price index is the consumer price index (CPI) which tracks the value of a basket of consumer goods and services.
John E. Sayre and Alan J. Morris, Principles of Macroeconomics: Measuring the Economy's Performance, Edition 6 (Toronto, Ontario: McGraw-Hill 2009), 125

Formula

[Change in Price Index / Price Index for previous year] x 100

http://en.wikipedia.org/wiki/Consumer_price_index, accessed April 15, '12