How is inflation measured?

Inflation is measured by calculating the percentage change in the Consumer Price Index (CPI) over a certain period of time. The CPI is a measure of the average price level of a basket of goods and services consumed by households. It is calculated by taking the price of a representative sample of goods and services, and comparing it to the price of the same basket in a base year. The percentage change in the CPI is then used as the inflation rate.

The effects of inflation are often not directly felt but are played out over a long time, especially long-term investments are vulnerable to inflation.


At Horizon65, we created a mobile app that enabled you to check the effect of inflation on your savings.

Similar Questions

How much is inflation per year?

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently purchasing power is ...

How inflation rate affect business?

The inflation rate affects business by influencing the value of money. A high inflation rate means that money loses value and thus...

How inflation affects the economy?

Inflation is an increase in the general price level of goods and services in an economy over a period of time. When the general pr...

Ready to get started?

Download our app and start gaining insight into your current and future finances.