Inflation is measured by examining the percent increase in the ________ from one year to the next.

Question

Quizplus · Accepted Answer

Inflation is most commonly measured by looking at the percent increase in the Consumer Price Index (CPI), which tracks changes in the prices of a basket of goods and services over time. This provides a measure of the overall cost of living and can be used to gauge the extent to which prices are rising or falling. The other options listed are not necessarily indicative of inflation on their own. For example, the price of gas may fluctuate for reasons other than inflation, and GDP growth does not necessarily reflect the prices of goods and services. Nominal GDP includes changes in prices, but it does not provide a clear measure of inflation on its own.

Inflation Is Measured by Examining the Percent Increase in the ________