Consider the following statements 1 Core inflation eliminates products that can have ...........

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Consider the following statements:

1. Core inflation eliminates products that can have temporary price shocks

2. Headline inflation takes into account in the price of food and energy.

3. Headline inflation is able to give a better projection of effects of supply and demand on GDP.

Which of the given statements is correct?

1 only

1 and 3

1 and 2

All of above

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Explanation:

3rd statement is incorrect because headline inflation cannot give better projection of effects of supply and demand on GDP.
Headline inflation is the raw inflation figure as reported through the Consumer Price Index (CPI) that is released monthly by the Bureau of Labor Statistics. The CPI calculates the cost to purchase a fixed basket of goods, as a way of determining how much inflation is occurring in the broad economy. The CPI uses a base year and indexes the current year's prices according to the base year's values.