Measuring+Inflation

=Measuring Inflation = When measuring price level fluctuations, economists look at changes in the average price level of goods and services in a nation. To measure the price level, economists construct a price index. The two most common price indexes are the **consumer price index** and the ** producer price index **:

 Producer Price Index (PPI) ** 
 * Consumer Price Index (CPI) **
 * A measure of the average change over time in the price of a fixed group of products
 * The Bureau of Labor Statistics (BLS) calculates and reports the CPI each month
 * 1. The bureau selects a base year against which to measure price changes
 * 2. The bureau selects a representative sample of commonly purchased consumer items, called the market basket. This sample includes items that the typical consumer might buy - i.e. food, clothing, shelter, utilities, transportation, entertainment, and health care.
 * 3. The bureau samples the prices of the goods and services in the market basket in selected areas across the nation
 * Is a measure of the average change over time in the prices of goods and services bought by producers
 * Is compiled for selected types of products as well as for production stages or particular industries