Consider the following statements regarding inflation:
Statement (A): Head-line inflation refers to the rate of change in the Consumer Price Index Number, a measure of the average price of a standard basket of goods and services consumed by a typical family.
Statement (B): Core inflation measures the change in average consumer prices after excluding from the Consumer Price Index certain items of volatile prices such as food and fuel.
Of these statements,
- A.Neither (A) nor (B) is correct.
- B.Both (A) and (B) are correct.
- C.Only (B) is correct.
- D.Only (A) is correct.
Show answer
Headline inflation is the change in the overall Consumer Price Index, which tracks the average price of a fixed basket of goods and services bought by a typical household, including food, fuel, clothing, housing and services.
Read the full explanation →