ECON-1103 Lecture Notes - Market Basket, Gdp Deflator, Core Inflation
Document Summary
Inflation- persistent rise in the average price of goods and services. Deflation-persistent fall in the price level of goods and services. 1)-consumer price index- it measures the average prices paid by households for a fixed basket of goods and services. The base year is always going to be 100. (the cost of basket in the current year/cost of basket initially)*100. Cpi basket- are the goods and services included in the calculation. It is a broader measure of cost of living and more accurate.
