PRICE INDEX Meaning and
Definition
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A price index is a statistical measure that tracks the average change in prices of goods and services over time within a specified market or economy. It is designed to provide insight into the overall level of inflation or deflation in an economy by measuring the price changes of a specific basket of goods and services.
The price index is typically expressed as an aggregate number, which represents the relative change in prices from a base period. It is calculated by assigning a weight to each item in the basket, reflecting its importance in the overall economy. These weights are based on consumption patterns and are usually derived from data on consumer expenditure.
Price indices are commonly used by economists, policymakers, and businesses to analyze and monitor price movements, assess changes in purchasing power, and adjust wages, contracts, or prices accordingly. They provide a valuable tool for understanding inflationary or deflationary pressures within an economy and guiding economic and financial decision-making.
Some well-known price indices include the Consumer Price Index (CPI), Producer Price Index (PPI), and the GDP deflator. The CPI measures the change in prices of a representative basket of goods and services consumed by households, whereas the PPI tracks the average change in selling prices received by producers. The GDP deflator is a price index that reflects the changes in the prices of all goods and services produced in an economy.
Common Misspellings for PRICE INDEX
- orice index
- lrice index
- -rice index
- 0rice index
- peice index
- pdice index
- pfice index
- ptice index
- p5ice index
- p4ice index
- pruce index
- prjce index
- prkce index
- proce index
- pr9ce index
- pr8ce index
- prixe index
- prive index
- prife index
Etymology of PRICE INDEX
The word "price" originated from Old French "pris" meaning "value, worth, reward", which in turn came from Late Latin "pretium" meaning "price, reward, value". The term "index" comes from Latin "indicare" meaning "to point out, indicate, show". In combination, the term "price index" denotes a numerical representation or measure that indicates changes in the general level of prices of goods and services over a period of time.
Similar spelling words for PRICE INDEX
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