| Description |
A price index is a measure of the change in the prices of goods and services either as they leave their place of production or as they enter the production process. A measure of the change in the prices received by domestic producers for their outputs or of the change in the prices paid by domestic producers for their intermediate inputs. Therefore, basically, a price index illustrates how the price of a product or of a basket of products has changed since the base period. The base price of an index is 100 by agreement, meaning that, for instance, an index equal to 110 reflects an increase in the absolute price of 10% and an index equal to 95 a decrease of 5%. |