Constant dollars
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In order to facilitate comparisons of fiscal data from different years, currency amounts are sometimes rendered in constant dollars. Because of inflation, the purchasing power of a dollar can change over time. Constant dollar measurements account for this discrepancy by adjusting all dollar amounts to reflect purchasing power as of a given year.[1][2]
Constant dollars are calculated using the Consumer Price Index, which is defined by the Bureau of Labor Statistics as "a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services." These goods are grouped into eight categories: food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and miscellaneous expenses.[3]
To calculate constant dollar figures, see this calculator sponsored by the Bureau of Labor Statistics.
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