economicss

Question 1

how to measure inflation

Answer 1

1 complete the Living Costs and Food Survey to understand what average families are buying.
2.Step 2: Each item in the basket is assigned a weight based on its importance in household budgets.
3. Step 3: Prices for the items in the basket are then collected from retailers
Step 4: The current prices of these items are compared to prices from a previous period.
5. Step 5: The percentage change in prices for each item is calculated.
Step 6: Finally, all the percentage changes are added together and averaged to find the overall inflation rate.