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Our current inflation rate in the United States is 1.8%. Explain as clearly as possible what...

Our current inflation rate in the United States is 1.8%. Explain as clearly as possible what that number means, how it is calculated, and how it compares to goals for inflation.

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Inflation Rate: The standard measure of inflation, the percentage change annually in an overall price index, typically the consumer price index over time, is inflation rate. Economists believe that unsustainable increase in money supply induces extremely high inflation levels and hyperinflation.

Formula of calculation: The formula for the measurement of the inflation rate using the CPI is relatively simple. Tausends of prices are surveyed each month and the CPI is produced throughout the country by the Bureau of Labor Statistics

If the price index is 100 in one year and the price index is 115, then the annual inflation rate= (115-100) is divided by 100 x 100. So the inflation rate is= 15%.

Meaning: The figure indicates an rise of 1.8% over the previous year in the average prices of the economy. The price of template baskets is calculated by comparison with the preceding year. Our goal is 1.5%. Inflation is therefore higher than expected.

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