The "core" inflation rate is typically defined as the change in consumer prices for all goods included in the CPI basket
Posted: Thu May 19, 2022 10:57 am
The "core" inflation rate is typically defined as the change in
consumer prices for all goods included in the CPI basket except
energy and food products. Suppose the overall inflation rate based
on the CPI was 4 percent for the past year, and energy and food
prices did not change during the year. Is the core inflation rate
for the past year higher or lower than 4 percent?
A) Higher
B) Lower
C) They are the same
D) We do not have enough information to answer this question
Why the answer is A? I don't understand it
consumer prices for all goods included in the CPI basket except
energy and food products. Suppose the overall inflation rate based
on the CPI was 4 percent for the past year, and energy and food
prices did not change during the year. Is the core inflation rate
for the past year higher or lower than 4 percent?
A) Higher
B) Lower
C) They are the same
D) We do not have enough information to answer this question
Why the answer is A? I don't understand it