The Fed uses a "core" price index,one that excludes food and energy prices to measure inflation.It does so because
A)food and energy are inelastic goods and consumers will buy them regardless of their price.
B)it wants to avoid the blame for high gasoline prices causing inflation.
C)food and energy prices have wide swings that are not related to the causes of general inflation.
D)food and energy prices do not change all that much during the short run,so are irrelevant to the calculation of inflation.

Question

Quizplus · Accepted Answer

Food and energy prices can have significant fluctuations due to factors such as weather, geopolitical events, and supply disruptions, which are not necessarily related to broader economic factors that cause inflation. Therefore, using a measure of inflation that excludes these volatile components can provide a better indication of the underlying trend in inflation.

The Fed Uses a "Core" Price Index,one That Excludes Food