Inflation rate is a percentage of increase in the current average price of goods in relative to the average price of goods in a base year in the past. It is calculated by the following steps. First, the base year is selected, which can be the previous year or a specific year before. Second, the range of goods is set. Since inflation rate is a measure for the change in living expenses, ordinary necessities should be included in the basket. Third, both sums of prices in the basket in the current year and the base year are calculated, and then the former is devided by the latter. Finally, this figure less 1 makes the inflation rate for the period.