Concept and Measurement of Inflation
Inflation is defined as a noticeable rise in the price level of goods and services across a nation in a given period of time. Inflation is measured using the Consumer Price Index (CPI.) This measurement is a calculation of the weighted average of the an average 'basket' of consumer's goods and services. The average changes in these prices is used to calculate the rate of inflation. This is shown by the formula below:
Want your ATAR notes to empower over 77,000 students per year?
Join the Team.
Sign Up for Free to Read More
Get instant access to all content and subscribe to our weekly email list on study tips, opportunities and other free resources.
It only takes a minute...