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Consider the following statements about Inflation in India and identify the correct one/s.
1. Headline inflation is the total inflation due to prices of all the commodities (including commodities like food and energy).
2. Core Inflation is the inflation excluding food and fuel group.
3. Refined Core inflation is the Core inflation excluding Housing sector.
Select the correct answer using codes given below
1 and 2 only
2 and 3 only
2 only
1 and 3 only
..First statement 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. It iss the raw inflation figure as reported through the Consumer Price Index (CPI) that is released monthly by the Bureau of Labour 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. Second statement is correct. 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. This measure of inflation excludes these items because their prices are much more volatile. It is most often calculated using the consumer price index (CPI). Third statement is incorrect. Refined Core inflation is the Core inflation excluding fuel components.
By: Vishal ProfileResourcesReport error
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