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Prices and CPI
Prices and CPI
The nominal price of a good (sometimes Real price of a good (sometimes called its
called its “current-dollar” price) is its “constant-dollar” price) is the price relative
absolute price. For example, the nominal to an aggregate measure of prices. In other
price of a pound of butter was about $0.87 words, it is the price adjusted for inflation.
in 1970, $1.88 in 1980, about $1.99 in Price of a good relative to an aggregate
1990, and about $3.48 in 2015. These are measure of prices; price adjusted for
the prices you would have seen in inflation.
supermarkets in those years.
CONSUMER PRICE INDEX (CPI)
CONSUMER PRICE INDEX