Food and energy prices are omitted from the core CPI because
A) their vulnerability to fluctuations for reasons that may not be related to general inflation and that are not readily controlled by monetary policy.
B) the majority of food and energy are purchased by large firms rather than consumers, making them a poor reflection of inflation faced by households.
C) the provision of food and energy is more related to services than goods.
D) it is a fixed market-basket price index that does not allow the mix of products to change each year.
E) Food and energy make up a very small portion of household spending.
Correct Answer:
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