Price index
Definition
A price index measures the average change over time in the prices paid by consumers for a fixed basket of goods and services. It helps track inflationary trends by comparing current prices with those from a base year.
Related terms
Consumer Price Index (CPI): A specific price index that measures changes in the average prices paid by urban consumers for a fixed basket of goods and services.
Producer Price Index (PPI): A price index that measures the average change in selling prices received by domestic producers for their output.
Inflation rate: The percentage increase in the general level of prices over a period of time, usually measured annually.
"Price index" appears in:
Study guides (1)
AP Macroeconomics - 2.4 Price Indices and Inflation
Practice Questions (1)
Which of the following is an example of a price index used to measure inflation?
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Resources
Cram Mode
AP Score Calculators
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Help Center
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.