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Questions and Answers
What is the purpose of core inflation?
What is the purpose of core inflation?
- To measure the inflation rate of essential goods only
- To focus solely on non-essential items' price changes
- To eliminate transitory effects on the CPI (correct)
- To include all components of the CPI basket for accuracy
Which components are typically removed in the calculation of core inflation?
Which components are typically removed in the calculation of core inflation?
- Goods with stable prices
- Non-essential luxury items
- Services that have regular price changes
- Items affected by supply side factors (correct)
How does core inflation differ from regular inflation measures?
How does core inflation differ from regular inflation measures?
- It excludes components influenced by supply side factors (correct)
- It only focuses on transitory effects on the CPI
- It includes only essential goods in the calculation
- It considers all items equally in the CPI basket
Which of the following statements best describes core inflation?
Which of the following statements best describes core inflation?
Why is core inflation considered a more stable measure?
Why is core inflation considered a more stable measure?
What is the main method used to measure inflation today?
What is the main method used to measure inflation today?
Why was the term 'inflation' originally used by early economists?
Why was the term 'inflation' originally used by early economists?
What is typically represented by the value '100' in Consumer Price Index (CPI) calculations?
What is typically represented by the value '100' in Consumer Price Index (CPI) calculations?
How did the European Central Bank measure food inflation during the COVID-19 pandemic?
How did the European Central Bank measure food inflation during the COVID-19 pandemic?
In some countries, how is owner-occupied housing (OOH) included in inflation measurement?
In some countries, how is owner-occupied housing (OOH) included in inflation measurement?
What was a significant factor early economists categorized as influencing the rise or fall of prices?
What was a significant factor early economists categorized as influencing the rise or fall of prices?
What distinguishes the 'Ex.food and energy' approach to core inflation measurement from other approaches?
What distinguishes the 'Ex.food and energy' approach to core inflation measurement from other approaches?
How do statistical approaches aim to reduce temporary fluctuations in inflation?
How do statistical approaches aim to reduce temporary fluctuations in inflation?
What is a challenge faced by economic approaches in deriving a measure of core inflation?
What is a challenge faced by economic approaches in deriving a measure of core inflation?
What do central banks typically exclude in core inflation measures?
What do central banks typically exclude in core inflation measures?
How can inflation expectations impact economic outcomes?
How can inflation expectations impact economic outcomes?
Which factor determines the choice of core inflation measurement method?
Which factor determines the choice of core inflation measurement method?
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