Price Indices and Inflation- Macro 2.4

Jacob Clifford's video tutorial on ACDC Econ explains inflation and the Consumer Price Index (CPI). It covers how to calculate CPI and inflation rates, emphasizing the importance of understanding base years and percent changes. The video includes practice problems to reinforce learning and clarifies common misconceptions about inflation calculations.

What is the definition of inflation as discussed in the video?

Explain how the government tracks inflation using market baskets.

What is the difference between the inflation rate and index numbers?

What does a CPI of 240 indicate about prices compared to the base year?

Describe the significance of the base year in calculating CPI.

How do you interpret a CPI value that is less than 100?

How is the Consumer Price Index (CPI) calculated?

What is the formula for calculating the inflation rate based on CPI?

How does the CPI reflect changes in purchasing power over time?

What common misconceptions do students have about calculating inflation rates?