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  • Measuring Inflation

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    nisa
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    The document discusses how inflation is measured. Consumer price index (CPI) or retail price index (RPI) are used to track inflation. A basket of typical consumer goods and services consumed by households is compiled and the average price of the basket is tracked over time. Agencies collect price data from outlets nationwide to determine the national average price of items in the basket. The change in the price of the basket over time is reflected in the consumer price index, which is used to determine the inflation rate.

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    Inflation

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    The document discusses how inflation is measured. Consumer price index (CPI) or retail price index (RPI) are used to track inflation. A basket of typical consumer goods and services consumed by households is compiled and the average price of the basket is tracked over time. Agencies collect price data from outlets nationwide to determine the national average price of items in the basket. The change in the price of the basket over time is reflected in the consumer price index, which is used to determine the inflation rate.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    18 views3 pages

    Measuring Inflation

    Uploaded by

    nisa
    The document discusses how inflation is measured. Consumer price index (CPI) or retail price index (RPI) are used to track inflation. A basket of typical consumer goods and services consumed by households is compiled and the average price of the basket is tracked over time. Agencies collect price data from outlets nationwide to determine the national average price of items in the basket. The change in the price of the basket over time is reflected in the consumer price index, which is used to determine the inflation rate.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 3

    MEASURING

    INFLATION

    MEASURE OF INFLATION :
    Consumer price index (CPI)
    OR
    Retail Price Index (RPI)
    • Basket of consumer goods & services
    - it measures how price of this basket change over
    time.
    - price of basket , average price

    • Impossible to measure inflation, so what they do?


    - agency economic data creates list of typical goods
    & services consumed by average household.
    - price of the items is measure every month/ year, to
    know change in the price of basket.
    • Change in the price of basket, reflected the
    CONSUMER PRICE INDEX!

    • Some goods & services consumed are more


    important than others  weight (importance)

    • How did you know the price of the items in the


    basket? - by collecting prices from shopping
    outlets throughout the country -> national
    average price is determined.

    • Change in the price index -> inflation rated

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