Measuring the rate of inflation using a market basket that excludes some volatile components of the CPI such as food and energy prices is preferred by some analysts because this measure, called core inflation,
A)provides a real, rather than a nominal, rate of inflation.
B)gives a better measure of ongoing, sustained price changes.
C)is more consistent with measures of inflation used in other countries.
D)fluctuates more than measures of inflation that include food and energy prices.

Question

Quizplus · Accepted Answer

Core inflation excludes volatile items like food and energy to provide a clearer view of long-term inflation trends, reflecting ongoing, sustained price changes.

Measuring the Rate of Inflation Using a Market Basket That