Inflation as an economic phenomenon affects every aspect of society. At the same time, the main goal of the state and the Central Bank is to regulate inflationary processes. And for this it is necessary to determine the level of inflation or price increases.
It is necessary
- - Price level statistics;
- - calculator;
- - notebook and pen.
Instructions
Step 1
Determine the indices (growth rates) of prices. For this, the prices of the current year are divided by the prices of the previous base period. The product is multiplied by one hundred percent. For the reporting period, you can take a month, and a quarter, and a year. For example, the cost of cars in 2003 was 2,300,000 rubles, and in 2004 - 2,560,000 rubles. Thus, the car price index is:
(2 560 000 / 2 300 000)*100% = 1.11%.
Step 2
Determine the rate of increase in 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 as a percentage. Both the base and the reporting period are taken as a month or a year. Comparison of indicators allows the government to quickly and adequately respond to a high rate of price growth. In the above example, the growth rate of prices is equal to:
(2 560 000 – 2 300 000) / 2 300 000 * 100% = 11.3%.
Step 3
Determine by the price index their average growth for a certain period. In this example, inflation, which refers to the rise in car prices, is expressed at 1.1%. The figure is small, but consumers are especially acutely aware of such price increases.
Step 4
Determine the GDP Index. It is worth noting that in addition to the above indices, inflation is determined by a number of other indicators, such as GDP or the consumer basket. Thus, the GDP index is equal to the ratio of the value of the GDP basket in the current period to the same indicator for the base year. The indicator is expressed as a percentage. And as a period, a month, a quarter or a year is selected. If the inflation rate decreases markedly, we can talk about such a phenomenon as disinflation. This means that the policy of the state in relation to the regulation of prices for goods or services is effective. This allows consumers to be convinced of an improvement in their standard of living.
