Inflation can be calculated as headline inflation or core inflation the difference being ........

Economic Affairs Inflation

Inflation can be calculated as headline inflation or core inflation, the difference being?

While headline inflation includes all the items in the inflation basket, core inflation includes only the final products excluding the intermediate goods

While headline inflation includes all the items in the inflation basket, core inflation excludes the volatile items like food and fuel

While headline inflation includes only the final products, core inflation includes only the intermediate products

None of the above

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Explanation:

2nd option is correct.

Headline inflation is a measure of the total inflation within an economy, including commodities such as food and energy prices (e.g., oil and gas), which tend to be much more volatile and prone to inflationary spikes.

Core inflation represents the long run trend in the price level. In measuring long run inflation, transitory price changes should be excluded. One way of accomplishing this is by excluding items frequently subject to volatile prices, like food and energy.