What has upswings and downturns, troughs, peaks, and plateaus? Though such terms could easily describe a roller coaster ride, they are also commonly used to describe the business cycle.

"If the current annual inflation rate is 7.9 percent, why do my bills seem like they're 10 percent higher than last year?"

Many of us ask ourselves that question, and it illustrates the importance of understanding how inflation is reported and how it can affect investments.