Name any 2 methods used to measure inflation rate indicator
1) Consumer Price Index (CPI): The CPI is a commonly used method to measure inflation. It calculates the average price change of a basket of goods and services purchased by households over time. The CPI is often used to compare changes in prices and inflation rates across different time periods or geographic regions.
2) Producer Price Index (PPI): The PPI measures the average change in selling prices received by domestic producers of goods and services over time. It provides information about price changes at the wholesale level and is often used as an early indicator of inflationary pressures in the economy. The PPI can be divided into different sub-indices based on industry sectors or stages of production.
Two common methods used to measure the inflation rate are:
1. Consumer Price Index (CPI): The CPI measures changes in the average price level of a basket of goods and services commonly consumed by households. It calculates the weighted average of the prices of various goods and services, such as food, housing, transportation, and healthcare. The percentage change in CPI over a specific time period indicates the inflation rate.
2. Producer Price Index (PPI): The PPI measures changes in the average prices received by domestic producers for their output. It tracks price changes for intermediate and final goods at various stages of production. PPI provides insights into inflationary pressures at the producer level, which can affect consumer prices in the long run. The percentage change in PPI indicates the inflation rate from the producer's perspective.