Consider the following statements regarding inflation Statement (A) : Head-line inflation refers to the rate of change in the Consumer Price Index Number, a measure of the average price of a standard basket of goods and services consumed by a typical family. Statement (B) : Core inflation measures the change in average consumer prices after excluding from the Consumer Price Index certain items of volatile prices such as food and fuel. Of these statements

Question

Consider the following statements regarding inflation  Statement (A) : Head-line inflation refers to the rate of change in the Consumer Price Index Number, a measure of the average price of a standard basket of goods and services consumed by a typical family. Statement (B) : Core inflation measures the change in average consumer prices after excluding from the Consumer Price Index certain items of volatile prices such as food and fuel. Of these statements

Accepted Answer

B. Both (A) and (B) are correct. Headline v/s Core Inflation Consumer Price Index (CPI) The price of a weighted average market basket of consumer goods and services purchased by households (Retail). Commodities - Goods and Services Headline and core inflation measured by the Central Statistical Officer in the form of CP or WPI. Headline inflation: rate of change in the Consumer Price Index (WPI same case) Includes all goods and services . Core inflation is a measure of price changes excluding volatile components like food and fuel from headline inflation. PYQ’s Solution English 19