Note: This is post #105 in a weekly video series on basic economics.

Inflation is an average rise in prices. But how exactly is this average rise in prices measured?

In this video by Marginal Revolution University,Alex Tabarrok explains how inflation in the United States can be measured using theBureau of Labor Statistics’ Consumer Price Index (CPI)—a weighted average of the price increases. We can calculate the inflation rate by the percentage change in the CPI over a given period of time.

(If you find the pace of the videos too slow, I’d mend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Clickhereto see other videos in the Introduction to Economics series.