ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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it includes food and fuel components
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it does not include food and fuel components
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it is the main inflation
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None of the above
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Detailed explanation-1: -Core inflation excludes food and fuel items from headline inflation. 3. Since the prices of fuel and food items tend to fluctuate and create ‘noise’ in inflation computation, core inflation is less volatile than headline inflation.
Detailed explanation-2: -Headline inflationcommonly known as the CPIincludes more volatile food and energy price data, whereas the core inflation index excludes it.
Detailed explanation-3: -The headline inflation figure includes inflation in a basket of goods that includes commodities like food and energy. It is different from core inflation, which excludes food and energy prices while calculating inflation. Food and energy are not included in core inflation because their prices are volatile.
Detailed explanation-4: -Core inflation is the change in the costs of goods and services but does not include those from the food and energy sectors. Food and energy prices are exempt from this calculation because their prices can be too volatile or fluctuate wildly.
Detailed explanation-5: -Core inflation is inflation-related to all the commodities, goods, and services in the economy minus the volatile food prices and fuel prices.