Measuring Inflation: CPI

Consumer Price Index

- average level of prices of goods and services a typical Canadian family consumes
- same goods every year
- doesn't reflect that households will switch to cheaper goods
- includes goods and services from other countries

measured by :

cost of market basket in current year divided by the cost of market basket in the base year multiplied by 100


Stephanie Powers, "Lecture Notes", Red Deer College, Accessed April 16, 2012