Inflation means an overall increase in the prices of goods and services. It is a decrease in the value of a currency. The Currency used for purchase goods and services yesterday are not enough for today, the cost increased over and above time value of money.
It can be measured in three ways
1. Consumer Price Index (CPI)
The Consumer Price Index measures prices of a selection of goods and services purchased by a "typical consumer".The inflation rate is the percentage rate of change of a price index over time.CPI is the most common measurement.
It can be measured in three ways
1. Consumer Price Index (CPI)
The Consumer Price Index measures prices of a selection of goods and services purchased by a "typical consumer".The inflation rate is the percentage rate of change of a price index over time.CPI is the most common measurement.
2. Producer Price Indices (PPI)
Measures the average change over time in the selling prices received by domestic producers for their output.
In India and the United States, an earlier version of the PPI was called the Wholesale Price Index.
3. Commodity Price Indices
Which measure the price of a selection of commodities. In the present commodity price indices are weighted by the relative importance of the components to the "all in" cost of an employee.
4.Core Price Indices
Core Inflation is a measurement of non-volatile goods such as food and non-precious metals. It leaves out goods like oil because oil's price is subject to wild fluctuations.
