Final answer:
The Consumer Price Index (CPI) is calculated monthly by the Bureau of Labor Statistics. This index, which measures inflation, is differentiated from other indices like the PPI, International Price Index, Employment Cost Index, and GDP deflator, each measuring different aspects of prices and economic change.
Step-by-step explanation:
The Consumer Price Index (CPI) is calculated monthly by the Bureau of Labor Statistics, which is option 2. The CPI is the most commonly cited measure of inflation in the United States. The Bureau of Labor Statistics ensures accuracy and avoids biases through various means, such as regularly updating the basket of goods and services, and using advanced statistical techniques to analyze the data.
It is important to differentiate among various economic indices: the CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services; the Producer Price Index (PPI) measures the average change over time in the selling prices received by domestic producers for their output; the International Price Index focuses on the prices of goods that are traded internationally; the Employment Cost Index looks at the costs of labor for businesses; and the GDP deflator measures the changes in prices of all goods and services produced in the country.