Price level

From Wikipedia, the free encyclopedia

Please help improve this article or section by expanding it. Further information might be found on the talk page or at requests for expansion. (September 2007)

The price level is the average price at which each unit of physical output is sold. A commonly used measure is a consumer price index, which is one particular type of price index. Price indexes are typically constructed to have a relative value of 100 (or 1.00) in a specific year called the base year.

Inflation or the inflation rate is measured by the percentage increase in the price level per year. Similarly, a negative rate of inflation is referred to as deflation.