Asked by Shannen Relova on Jun 03, 2024
Verified
List the five steps for calculating the consumer price index and inflation rate.
Consumer Price Index
A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, used to estimate the economy's inflation rate.
Inflation Rate
The annual percentage increase in the general price level of goods and services, reflecting the rate at which the purchasing power of currency is eroded.
- Familiarize oneself with the approach for determining the Consumer Price Index (CPI).
Verified Answer
KS
Kadeidra StatonJun 10, 2024
Final Answer :
(1) Survey consumers to determine a fixed basket of goods, (2) find the price for each good, (3) calculate the cost of a basket of goods for each period, (4) calculate the consumer price index, and (5) calculate the inflation rate.
Learning Objectives
- Familiarize oneself with the approach for determining the Consumer Price Index (CPI).