Measuring inflation

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  • Created by: Jess
  • Created on: 18-04-14 15:27

Inflation: a sustained rise in price level

How inflation is measured:

  • select a base year (relatively standard year in which nothing unusual happened)
  • decide what items should be included in the price index - shopping basket
  • weights are attached to the goods, reflecting the proportion spent on different items

Consumer prices index: a measure of changes in the price of a representative basket of consumer goods and services.

Retail price index: a measure of inflation that is used for adjusting pensions and other benefits to take into account changes in…


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