Advice 1: How to calculate inflation rate

Inflation as an economic phenomenon concerns every part of society. The main goal of the state and the Central Bank is to control inflation. And for this it is necessary to determine the level of inflation or rising prices.
How to calculate inflation rate
You will need
  • - Statistics of the price level;
  • calculator;
  • - Notepad and pen.
Define indexes (growth rates) of prices. For that current year prices are divided into prices of the previous base period. The product is multiplied by one hundred percent. During the reporting period, you can take a month, quarter, and year.For example, the cost of vehicles in 2003 was equal to 2 300 000 rubles, and in 2004 - 2 560 000. Thus, the price index for cars is equal to:
(2 560 000 / 2 300 000)*100% = 1.11%.
Determine the rate of growth of prices. This indicator is calculated as the difference between the price of the current year and the price of the previous period divided by the price of the previous year and multiplied by 100%. The indicator is measured in percent. As for the baseline and for the reporting period was adopted a month or a year. The comparison of indicators allows the government to quickly and adequately respond to the high rate of growth of prices. In the above example the growth rate of prices is equal to:
(2 560 000 – 2 300 000) / 2 300 000 * 100% = 11.3%.
Determine the price index, their average growth over a certain period. In this example, inflation, which concerns the growth of prices for cars, is expressed in 1.1%. Small, but consumers are particularly sensitive to such price increases.
Determine the index of GDP.It is worth noting that in addition to the above indices, inflation is determined by a number of indicators, such as GDP or the consumer basket. So GDP is equal to the ratio of the cost of a basket of GDP in the current period to the same period in the base year. Is expressed percentage. And as the period select month, quarter or year.If the level of inflation is markedly reduced, it is possible to speak about the phenomenon of disinflation. So, the state policy carried out in relation to regulation of prices for goods or services, effective. This allows you to convince consumers to improve their standard of living.

Advice 2: How to determine the level of inflation

Inflation in economic systems, manifests itself by raising the General level of prices for various products. Therefore, in the period of inflation for the same money after a certain time you can buy less goods or services than before. So the money lose part of its real value.
How to determine the level of inflation
To measure inflation are subject to special economic-statistical indicators – indices (rate of) growth and price increases. The price index represents the relative change in the average price level for the conditional period. In turn, the average level of prices is called a weighted average of all prices for products in a certain set, defined consumer basket.
The level of inflation is a measure of the average level of price change of production with respect to the base period and is used as a magnitude of inflation, and is expressed in percentage for the year. As a rule, when calculating price index of prices in the base period using the following formula:SP = TSC / TSBG x 100%, gdeep index of the prices of the current period,
TSC – price value of the current period,
TSBG – expression prices of the base year.
Measurement of inflation using the growth rate of prices can be determined by the formula:TCP = (TSC-BSC) / BSC x 100% where TCP is the growth rate of prices for the current period,
TSC – the value of the prices of the current period,
Tspp – the value for the previous period.
There are different types of indexes price. Chain indices determine the ratio of the price of each following period from the previous one. Underlying or long-term indices define the size ratio of the prices of some period of defined time series with the basic period. It is possible to obtain the value of the underlying index through multiplication of values of chain indexes.
A rather important place among the price index is the deflator of GDP or GNP (gross domestic product or gross national product) is a price index in which the consumer basket includes absolutely all final goods or services. This index compares the growth of the General level of prices on the basis of a basket of national product. He Escalada according to the following formula:DWP = STP / SBP x 100%, where DWP – the value of the GDP deflator of the current period,
STP – figure cost of a basket of GDP in prices of the current period,
SBP – value cost of a basket of GDP in prices of the base year.
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