Question:
Which of the following is excluded from headline inflation to arrive at core inflation?
Which of the following is excluded from headline inflation to arrive at core inflation?
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Core inflation is used to measure the long-term trend in inflation by excluding volatile items like energy and food prices.
Updated On: Sep 24, 2025
- Energy prices
- Gold prices
- Automobile prices
- Share prices
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The Correct Option is A
Solution and Explanation
Step 1: Understanding core inflation.
Core inflation excludes volatile items such as food and energy prices to provide a clearer measure of long-term inflation trends.
Step 2: Analysis of options.
- (A) Energy prices: This is correct. Energy prices are excluded from core inflation because they can be highly volatile.
- (B) Gold prices: Gold prices are typically included in headline inflation, not excluded.
- (C) Automobile prices: Automobile prices are included in the inflation calculation.
- (D) Share prices: Share prices are not typically included in the inflation measure since they are asset prices, not consumer goods.
Step 3: Conclusion.
Energy prices are excluded from core inflation calculations, so the correct answer is (A).
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