[Solved] Which of the following statements about core inflation is correct? — Ans: Core inflation excludes volatile items like food and fuel to show persistent... | Economic Awareness

Economic Awareness - Sectors of Indian Economy

Which of the following statements about core inflation is correct?

ACore inflation excludes volatile items like food and fuel to show persistent trends

BCore inflation is more volatile than headline inflation

CCore inflation includes food and fuel prices to capture all price changes

DCore inflation is calculated only from wholesale price data

Step-by-Step Solution

Step 1: Identify the nature of core inflation
Core inflation aims to exclude volatile components to reflect stable inflation trends.
Step 2: Evaluate the statements
Only the statement that core inflation excludes food and fuel to show persistent trends is correct.
Final Answer:
Core inflation excludes volatile items like food and fuel to show persistent trends → Option A
Quick Check:
Core inflation excludes volatile items = true ✅

Quick Trick: Remember core inflation excludes volatility for stability.

Common Mistakes:

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