Comparing the core inflation rate to the Consumer Price Index, the core inflation rate
A)excludes the volatile elements of the CPI.
B)uses current period quantities, not base period quantities.
C)measures all goods produced, not just consumer goods.
D)includes volatile elements not in the CPI.
E)controls for the biases of the CPI.

Question

Quizplus · Accepted Answer

The core inflation rate is a measure of inflation that excludes the volatile elements of the Consumer Price Index (CPI) such as food and energy prices. This allows for a more accurate reflection of underlying inflation trends. The CPI, on the other hand, measures the price changes of a basket of goods and services purchased by households, including both volatile and non-volatile components.

Comparing the Core Inflation Rate to the Consumer Price Index