Separate inflation from the price level
See this course’s project requirements
An economic-news brief with source cards, inflation and real-pay calculations, labor-force analysis, rate scenarios and clear limits.
Keep your working files in your own notebook or software. Save a private description, checklist, and work link in My Proof.
What to include
- An indicator source card with units, periods and populations.
- An inflation calculation and a corrected headline explanation. A nominal-versus-real pay comparison with scope notes.
- A labor-force calculation and a careful interpretation of a rate change.
- A rate-news translation with a fixed/variable comparison.
- A source-based economic-news brief with calculations and limits.
Review and revise
Use these criteria to check your work and choose what to improve.
- Calculations reconcile to the supplied records, with units and dates labeled.
- Assumptions and missing information are visible, including the changed scenario.
- The recommendation follows the evidence and explains an important limitation.
- The six lesson outputs form a usable handoff that another learner can check.
Want more background?
The idea in everyday life
Fictional price index: Year 0 = 100, Year 1 = 104, Year 2 = 106.08. Use exact values; the base index of 100 is a reference, not a dollar price.
Slower inflation means prices rise more slowly; it does not mean prices have returned to an earlier level.
Separate inflation from the price level — worked practice
Slower inflation means prices rise more slowly; it does not mean prices have returned to an earlier level.
Fictional price index: Year 0 = 100, Year 1 = 104, Year 2 = 106.08. Use exact values; the base index of 100 is a reference, not a dollar price.
1. Calculate first change
Divide 104−100 by 100.
You should see: Year 1 inflation is 4%.
Percent change uses the earlier value.
2. Calculate second change
Divide 106.08−104 by 104.
You should see: Year 2 inflation is 2%.
The comparison base changed.
3. Compare levels
Subtract 100 from 106.08.
You should see: Prices are 6.08% above Year 0 in this index.
Two increases compound.
4. Rewrite headline
State that inflation slowed while prices continued to rise.
You should see: The explanation distinguishes rate from level.
Lower inflation is not the same as deflation.
What to finish
An inflation calculation and a corrected headline explanation.
Watch for this
Adding annual inflation rates as if the exact cumulative change were always their sum.
How can I tell I understand it?
Explain your calculation or classification and reproduce the changed case without copying the worked result.
Quick knowledge check
Answer all 3 questions. Get at least 2 right and the lesson completes automatically.
You’ll get an explanation for each answer. Signed in? Your results save to your account.
Pass the check. We’ll save the progress.
Answer all 3 questions above and get at least 2 right. You can review the explanations and try again.
Go to the knowledge checkOptional course overview video · same video as Lesson 1
The Consumer Price Index and Why Your Participation is Important
From BLS Videos. Watch here or open it on YouTube .
Optional course overview. Follow the written steps below at your own pace.Tools, templates, and lesson sources
Tools and templates
Tools open in a new tab so you can keep your place here.
Sources and further reading
Explore the references behind this lesson.
Source & access notes · checked 2026-09-12
Inspected price-index meaning, percent changes, population coverage and limitations.
Access: Public page inspected without a sign-in; linked services may have separate requirements.
Reuse: Link to the original. Free reading does not imply permission to reproduce the page; lessons and fixtures here are original.
Report a problem with this lesson
Tell us what went wrong. Please leave out personal information and private project contents.