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 Form 4 online business studies lessons on inflation

Meaning of inflation and formula for calculating consumer price index

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Answer Text:
INFLATION:
Meaning of inflation:
-Inflation refers to a general and persistent increase in prices as a result decreasing purchasing power of money.
Consumer price index(CPI):
-is most commonly used to measure the impact of inflation on households.
-this is a measure of the changes in the average prices of goods and services
sold to consumers over a given period of times.
CPI=𝑻𝒐𝒕𝒂𝒍 𝒘𝒆𝒊𝒈𝒉𝒕 𝒊𝒏𝒅𝒆𝒙 #div# 𝑻𝒐𝒕𝒂𝒍 𝒘𝒆𝒊𝒈𝒉𝒕
i.e
CPI=#frac{P_1times100}{p_0}#