The table below shows a hypothetical typical consumer’s market basket that consists of 10 units of beef and 20 units of chicken. Year        Price of Beef                                   Price of Chicken 2018                $4                                                     $4 2019                $5                                                     $5 2020               $9                                                     $6   A. Compute the CPI in 2019. B. What is the CPI inflation rate from 2019-2020? CPI vs. GDP deflator:

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Q: Consumer Price Index

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Price Index Analysis

A price index is used to measure inflation in most countries and is focused on a collection of products and services significant to a particular economic segment. It is a measure of changing prices over some time. The price index is a scale or a valuable device to measure changes in price levels. The economists randomly choose a certain year as the base year to convert the amount spent on a basket into a price index.