10. Creating your own CPI to measure inflation. The Consumer Price Index (CPI) is constructed by calculating the cost of a "basket" of goods that a typical consumer buys. Many other types of price indexes can also be constructed this way. Your assignment is to make up a Consumer Price Index (CPI) using items that you buy. Steps: 1. Fix the basket. Choose 10 different products, and be specific--for example, 15 ounces Kellogg's Corn Flakes, 12-pack Diet Coke. 2. Find the prices. Find the actual prices for each product-_-for example, 12-pack Diet Coke, $3.98. 3. Calculate the cost of the basket. Add up the total cost of buying all the items on your list (CPI basket). Your assignment is not complete without this step. 4. Lastly, choose a year. The farther back you go the better! You can go all the way to 1913. Then, go to BLS.GOV and place your ten prices (one at a time) in the top part of the inflation calculator. The bottom part is for your year you chose. (So choose the same year at the bottom each time to compare). Figure out what your prices were for all ten items for that year and then see how the CPI has risen for your items up to today! As an example $3.98 in January 2018 would be the same as $0.29 in January 1945