📈Price indices show the change in average prices of goods and services over time.
💰The Consumer Price Index (CPI) reflects the average prices of goods and services bought by consumers.
📉The CPI helps determine the cost of living and the impact of inflation on consumers.
🏭The Producer Price Index (PPI) measures the average prices at the producer level.
🌍Price indices can be used to compare inflation rates and economies across different countries.
What is the purpose of a price index?
—A price index measures the average price of a basket of goods and services over time, helping analyze changes in prices, inflation, and cost of living.
What does the Consumer Price Index (CPI) reflect?
—The CPI reflects the average prices of goods and services bought by consumers, providing insights into the impact of inflation on consumer expenses.
What is the difference between CPI and PPI?
—CPI measures consumer prices, while PPI measures producer prices. CPI reflects the cost of living for consumers, while PPI provides insights into input costs for producers.
How are price indices calculated?
—Price indices are calculated by comparing the cost of a fixed basket of goods and services in a given year to the cost of the same basket in a base year. The result is multiplied by 100 to obtain the index value.
How can price indices be used in economic analysis?
—Price indices help understand inflation rates, cost of living adjustments, wage increases, and the overall economic performance of different industries and countries.
00:00Price index is a measure that examines the average price of a basket of goods and services over time.
00:14The Consumer Price Index (CPI) reflects the average prices of goods and services bought by consumers.
00:24The CPI helps determine the cost of living and the impact of inflation on consumers.
01:13The Producer Price Index (PPI) measures the average prices at the producer level.
05:19Price indices can be used to compare inflation rates and economies across different countries.
