Price indices are used to remove the effect of inflation so that business and economic time series can be evaluated in a more meaningful way.

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Price indices, such as the Consumer Price Index (CPI) and Producer Price Index (PPI), are commonly used to adjust for the effects of inflation in measuring economic statistics, like the Gross Domestic Product (GDP) or retail sales. By accounting for changes in price levels over time, price indices allow for a more accurate evaluation of economic trends and performance.

Price Indices Are Used to Remove the Effect of Inflation