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Chapter 2: Consumer price index and inflation rate
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Study objectives: Understand the essence of inflation, how to calculate inflation rate, the shortcomings of CPI in measuring the cost of livings, comparing inflation rate measured by CPI and GDP deflator, application of inflation rate in making economic decision. | ẵTOOT Understand the essence of inflation How to calculate inflation rate The shortcomings of CPI in measuring the cost of livings Comparing inflation rate measured by CPI and GDP deflator Application of inflation rate in making economic decision OễT Q LŨW Inflation refers to a situation in which the economy s overall price level is consistently rising overtime. The inflation rate is the percentage change in the price level from the previous period.