How to Calculate the Consumer Price Index (CPI) and Inflation Rate 

Not for an exam, personally. But good luck! No, just someone who isn’t bad with math wanting to understand information better. Especially since everyone likes to add flavor and opinions to every conversation/publication when I just want the FACTS. Lol

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ndine test mangwana 😢

yes Greetings from Philippines 🤭😗🇵🇭

Right.

At a higher level of math, you start to do it (instead) backwards. Basically, An amateur in math will see a GDP as a whole number and not a whole fraction. Basically, GDP is adding fractions. Thus. When adding fractions, the answer is a fraction. GDP is supposed to be a fraction. And inflation is the changes of that fraction. He was explaining cumulative inflation. Cumulative inflation is not the same as inflation. Cumulative inflation will look like, 8/8 increases to 8/9, then increases to 8/10. And regular inflation is the changes in that fraction expressed in a percentage. While regular inflation looks like 2%, and stays the same on an average At a higher level of math, you start to do instead backward. Lock in the GDP to a whole fraction to do the math backward. It will be a speed trick. The GDP fraction will now look like 8/8 changes to 9/9, than changes to 10/10. Basically, since the GDP represents a whole pie, AKA a whole fraction. This is why an amateur in math will see a GDP as a whole number.

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​@@noel7777noel thanks for the additional perspective

Divide 15 over 25 times 100

Because your are calculating the percentage change in prices ( in other words the inflation) as compared to a base year. So if your basis of comparison changes i.e., the base year changes, the values for inflation will also change.

carley northcoast I don’t have a video that talks about just the concept of inflation. That is a good idea though! Any other videos you think I could use?

@@MrSinn "inflation" is "interest" rates. Inflation = interest rates Say I save X amount of dollars for retirement in 1990. Well. I want the same X amount of dollars when I retire in 2035. So. To adjust for inflation, I want the bank to match the interest with inflation. And it must match. And if both are zero. Inflation doesn't happen. Because everyone saving for a one star retirement and everyone receives a two star retirement is impossible math. And if this is tried, inflation will happen. So how to invest without inflation happening. Say I invest in a capital investment to earn interest rates. Say that capital investment is a pizza shop. If I want 1% interest rates, the pizza gets 1% more expensive. So 1% inflation happens on the price of the pizza. Inflation and interest rates are the same thing. The idea here is. To invest in something one themselves doesn't buy. For example. Investors in apartment buildings. The landlords never rent themselves. A Rob Peter to pay Paul. Now the landlord saves for a one star retirement, and receives a two star retirement, while the tenants save for a two star retirement and receives a one star retirement, so inflation doesn't happen. Because the math equation is now in equilibrium. You get your tenants to pay you interest rates. The tenants save for a two star retirement and receives a one star retirement. The landlords are Paul, and the tenants are Peter. In this rob Peter to pay Paul.

Just as an easy comparable number, it has no significant economic meaning

Congrats on being the first view!

adding up...

Yes. It is called deflation.

while this is a macroeconomics topic

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