Go to the Web site of the Federal Reserve Bank of St. Louis (FRED) (research.stlouisfed.org/fred2/) and find the most recent values and values from the same month one year before for the following three measures of the price level: (1) the Consumer Price Index for All Urban Consumers: All Items (CPIAUCSL), (2) the Personal Consumption Expenditures: Chain-type Price Index (PCEPI), and (3) the Personal Consumption Expenditures excluding food and energy (chain-type price index) (DPCCRG3A086NBEA).
a. Using these data, calculate the inflation rate over this year as measured by each of the three price indexes.
b. Which of the three measures of inflation was highest during this year? Which measure was lowest? Why do the measures of inflation differ?