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Which of the following statements about core inflation is INCORRECT?

medium Q5 of 15
Economic Awareness - Sectors of Indian Economy
Which of the following statements about core inflation is INCORRECT?
ACore inflation excludes food and fuel prices to avoid volatility
BCore inflation is used by RBI for monetary policy decisions
CCore inflation includes all consumer goods and services
DCore inflation helps in understanding underlying inflation trends
Step-by-Step Solution

  1. Step 1: Recall core inflation characteristics

    Core inflation excludes volatile items and guides policy decisions.

  2. Step 2: Identify incorrect statement

    Core inflation does not include all consumer goods and services; that describes headline inflation.

  3. Final Answer:

    Core inflation includes all consumer goods and services → Option C

  4. Quick Check:

    Core inflation includes all consumer goods/services = INCORRECT ✅
Quick Trick: Core inflation excludes volatile items unlike headline inflation.
Common Mistakes:
  • Confusing core inflation with headline inflation including all items.
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