![]() ![]() ![]() (Housing expenses, including rent and mortgages, constitute the largest component of the consumer basket in the United States.) The cost of this basket at a given time expressed relative to a base year is the consumer price index (CPI), and the percentage change in the CPI over a certain period is consumer price inflation, the most widely used measure of inflation. To measure the average consumer’s cost of living, government agencies conduct household surveys to identify a basket of commonly purchased items and track over time the cost of purchasing this basket. Measuring inflationĬonsumers’ cost of living depends on the prices of many goods and services and the share of each in the household budget. Whatever the context, inflation represents how much more expensive the relevant set of goods and/or services has become over a certain period, most commonly a year. But it can also be more narrowly calculated-for certain goods, such as food, or for services, such as a haircut, for example. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. Inflation is the rate of increase in prices over a given period of time. What, then, is inflation, and why is it so important? ![]() 1 in the United States-by President Gerald Ford in 1974. Inflation was even declared Public Enemy No. Central bankers often aspire to be known as “inflation hawks.” Politicians have won elections with promises to combat inflation, only to lose power after failing to do so. Inflation has plunged countries into long periods of instability. It may be one of the most familiar words in economics. Inflation measures how much more expensive a set of goods and services has become over a certain period, usually a year ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |