The most common measure of inflation is a statistic called the consumer price index.
The consumer price index is a measure used by economists to determine the level of inflation in an economy. It measures inflation by determining the changes in a basket of goods.
CPI = (cost of basket of goods in current period / cost of basket of goods in base period) x 100
If the consumer price index increases from one year to the next, it means that inflation has increased.
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