The annual rate of inflation is typically measured by
A) a percentage increase in the price of gasoline and other basic commodities.
B) the difference in the Consumer Price Index from one year to the next.
C) the percentage change in the Consumer Price Index.
D) the increase in the real GDP.

Question

Quizplus · Accepted Answer

The annual rate of inflation is typically measured by the percentage change in the Consumer Price Index (CPI). The CPI measures the average price level for goods and services purchased by households, and changes in the index over time indicate changes in the cost of living. Therefore, the percentage change in the CPI is the most accurate way to measure inflation over time.

The Annual Rate of Inflation Is Typically Measured by