Can be tracked by using the consumer price index

• Consumer Prices Index

  A measure of inflation in a country that uses index numbers to track the changes in the average cost of a basket of hundreds of goods and services that an average household would regularly buy
• Tracking inflation using the Consumer Prices Index

  1. Use index numbers to track changes in average cost of a basket of goods and services

  2. Base year value of basket set to 100

  3. Index number calculated as (average value of basket / base value) x 100

  4. Index number above 100 indicates inflation, below 100 indicates deflation