Answer to Question #146681 in Macroeconomics for Ndiwanga

Question

Explain how the inflation rate, that is usually reported every month in the media, is obtained.

Answer 1

It is measured depending on the previous cost of goods,since Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time. It is the constant rise in the general level of prices where a unit of currency buys less than it did in prior periods.