Question

which index is currently used to find inflation?​

Answer 1

inflation is the percentage change of the price level, what is the “price level”? When economists talk about the price level, what they mean is the average level of prices. To calculate the price level, they begin with the concept of a market basket of goods and services. Imagine a weekly trip to the grocery store. Think about the items you place in your shopping cart (or basket) to buy. That is your market basket. More formally, when economists talk about a market basket of goods and services, they are referring to the different items individuals, businesses, or organizations typically buy.

Answer 2

The most widely used index used for measurement of inflation is known as the Consumer Price Index(CPI).

Explanation:

• CPI is the most widely and popularly employed official index to evaluate the inflation rate in any country.
• CPI basically estimates the inflation rate in any country on the basis of a fixed basket of certain goods and services that each individual household usually purchases or allocates their expenditure on within a certain period of time.
• The basket of goods and services that is observed for each individual household remains fixed periodically and the consumption expenditure of the respective households are estimated from one time period to the other to measure any periodic variation in the price level of the goods and services of the various fixed baskets purchased by each respective individual households.
• The periodic price variation of the goods and services contained in the fixed basket of individual households provides an overall idea of the inflation rate in any country under CPI.