What term describes the method of measuring inflation?

The term that best describes the method of measuring inflation is the Consumer Price Index (CPI). The CPI is a statistical measure that examines the average change over time in the prices paid by consumers for a market basket of goods and services. This index is crucial for understanding how inflation affects consumers' purchasing power, as it reflects changes in the cost of living.

The Consumer Price Index specifically targets how prices for everyday items, such as food, clothing, rent, and medical care, evolve over time. By tracking these changes, the CPI helps economists and policymakers assess the level of inflation and make informed decisions regarding monetary policy.

Other terms, such as the Cost-of-Living Index, may refer to similar concepts but are not as widely recognized as the standard measure of inflation. Meanwhile, Price Benchmarking and Price Indexing are not established terms for measuring inflation in the way the CPI is. These alternatives may relate to evaluating prices against a standard or comparing prices across different markets but do not serve the specific purpose of measuring inflation directly.