Economics 6th form - Inflation: Define inflation - explain the difference between general price rises and a price rise in a particular market. Understand how inflation is measured - construct a simple weighted price index. Interpret, analyse and discuss the limitations of the CPI. Explore alternative measures of inflation such as the PPI. Explain the effects of inflation - describe the impact of inflation on trade, employment, growth and income distribution.
The Consumers Price Index (CPI) is one of New Zealand's best known statistics. The CPI provides a measure of change in the prices of goods and services bought by households. It is a measure of inflation which plays a crucial role in setting and monitoring monetary policy. It is also used to adjust benefit payments and in wage negotiations. The CPI pages in Schools Corner are based on information published in All About the Consumers Price Index - A Layperson's Guide. The pages also contain CPI index numbers (all groups) from 1916-2000. Some activities use formulas to work out price changes over time.