The core inflation rate,measured by the core PCE deflator,measures changes in the
A) price of only two consumer goods: food and fuel.
B) prices of all consumer goods.
C) prices of consumer goods except food and fuel.
D) prices of consumer goods except health care.

Question

Quizplus · Accepted Answer

The core inflation rate, as measured by the core PCE deflator, excludes the prices of food and energy as they are considered to be volatile and subject to large fluctuations. Therefore, the core inflation rate measures changes in the prices of consumer goods excluding food and fuel. Option C correctly states this. Options A, B, and D are incorrect.

The Core Inflation Rate,measured by the Core PCE Deflator,measures Changes