Consider the following statements:
(1) Headline inflation is a measure of the total inflation within an economy.
(2) Headline inflation is affected by areas of the market which may experience sudden inflationary spikes such as food, vegetables or energy.
Which of the statements given above is/are correct?

Only 1

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Only 2

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Both 1 and 2

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Neither 1 nor 2

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Solution

The correct option is C Both 1 and 2
Headline inflation encompasses all commodities and is a measure of the total inflation in the economy. Commodities such as food or energy which are much volatile and exhibit inflationary spikes compared to other commodities are also included in this measure.

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Similar questions

Q. Consider the following statements:
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(2) Inflationary spikes occur when a particular section of the economy experiences a sudden price rise.
Which of the statements given above is/are correct?

Q34) In the past few months, the two main inflation indicators — the Wholesale Price Index (WPI) and the Consumer Price Index (CPI) — are moving in widely divergent directions. Consider the following statements:

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2) CPI is measured on base year 2012

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(2) In the disinflation, the inflation is falls below the zero percent level.
Which of the statements given above is/are correct?

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The correct option is C Both 1 and 2Headline inflation encompasses all commodities and is a measure of the total inflation in the economy. Commodities such as food or energy which are much volatile and exhibit inflationary spikes compared to other commodities are also included in this measure.

The correct option is C Both 1 and 2
Headline inflation encompasses all commodities and is a measure of the total inflation in the economy. Commodities such as food or energy which are much volatile and exhibit inflationary spikes compared to other commodities are also included in this measure.