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4.2 Inflation & the Consumer Price Index

4.2 Inflation & the Consumer Price Index
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  • Math Help

    The United States Bureau of Labor Statistics (BLS) has an online calculator called the "CPI inflation calculator." (A screen capture of the calculator is shown below.) The calculator uses the average consumer price index for a given year. This data represents changes in prices of all goods and services purchased for consumption by urban households. For the current year, the latest monthly index value is used.

    To use the calculator, follow the steps given below.

    Note that for the years 2007 and later, the calculator uses index values rounded to three decimal places. Because the CPI given in Section 4.2 lists the numbers rounded to one decimal place, answers obtained using the calculator may differ from those shown in the text. For more information on the CPI, see the Math Help for page 162.

  • Consumer Suggestion

    If you're planning on investing your money in the future, but you're not sure where to start, you might want to consider investing in land. Buying inexpensive land can be a great investment decision. Check out sites like billyland.com where you can bid on cheap land for sale all over the United States.

    Always make sure to do research on any land before purchasing. Sometimes people who sell land for cheap might owe a back tax, which is passed on to the buyer.

  • Checkpoint Solution

    The CPI was 16.3 in 1942 and 218.1 in 2010. If the value of the washing machine kept up with inflation, it would be worth

  • Comments (2)

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    system user
    Guest   6 years ago |
    When I was reading this page, I thought about my great-grandmother. She told me that when she was a teenager, she worked for 8 hours to earn $1. My grandfather worked for 1 hour in 1960 to earn $1. My father worked for 15 minutes to earn $1 when he was a teenager. Now, I can earn $1 by working only 5 minutes.
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    system user
    Ron Larson (author)6 years ago |
    When you are comparing prices in different years, remember that occasionally the price of something can go down. For instance, in the collapse of the housing market in 2008, many homeowners ended up with a home mortgage on a house that was worth much less than they paid for it.
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