For the US and the country you have chosen, gather data on inflation rates for the...

For the US and the country you have chosen, gather data on inflation rates for the most recent three years that are available. Please make sure that you note the specific price index that you are using and provide a description of the characteristics of that index, particularly for the country you have selected. Please make sure that you fully explain the information you are providing. What has happened to prices and how has this affected the broader economy; is inflation in check in your country or is is a problem for the functioning of the economy (consider countries where there have been episodes of hyperinflation). Help us to understand the direction of prices in your country.

Expert Solution

Inflation in the US based on consumer price index is measured by Bureau of Labor Statistics. CPI is average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Indexes are available for major groups of consumer expenditures (food and beverages, housing, apparel, transportation, medical care, recreation, education and communications, and other goods and services), for items within each group, and for special categories, such as services.

Inflation rate in the US in last three years was 2.3% in 2019, 1.9% in 2018, and 2.1% in 2017. The US economy has seen one of the longest expansion, coupled with a benign inflation rate, it has enabled an increase in real GDP per capita and a higher standards of living for average Americans.

Inflation in India based on consumer price index, is measured by Ministry of Statistics and Programme Implementation (MOSPI) and Ministry of Labour and Employment, who are engaged in the measuring different CPIs for different groups or sectors. CPI inflation in India is also called as retail inflation as the prices are quoted from retailers.

Annual inflation rate in 2019 was 7.66%, a 2.8% increase from last year. In 2018 it was 4.86% an increase of 2.37% from previous year, and in 2017 inflation rate was 2.49%. Looking at the inflation rate and the GDP growth, we can say that the inflation rate except for the year 2019 was more or less under control, considering that many nations such as Zimbabwe, Argentina, have seen in the past hyper inflations reaching as high as 2000%.

Rahul Sunny answered 1 year ago

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