No Bull Economics Lessons

Macroeconomics & Microeconomics Concepts You Must Know

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How do you calculate the inflation rate?

Posted on April 16, 2014 at 10:35 AM

The inflation rate measures the percentage increase in consumer prices over a period of time. To calculate the inflation rate, we use a consumer price index (CPI). The consumer price index tracks the prices of goods and services that the typical household buys using a market basket sample (CPI = Market Basket of Specific Year / Market Basket of a Base Year).

The No Bull Review diagram below shows the formula for calculating the inflation rate when you have the CPIs.

AP Macroeconomics Unit 2 Measuring Economic Performance

Categories: AP Macroeconomics, Macro Unit 2 Measuring Economic Performance

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