wiz-icon
MyQuestionIcon
MyQuestionIcon
4
You visited us 4 times! Enjoying our articles? Unlock Full Access!
Question

Consider the following statements:
(1) Headline inflation may not present an accurate picture of the current state of the economy.
(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?

A
Only 1
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
Only 2
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
Both 1 and 2
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
D
Neither 1 nor 2
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution

The correct option is C Both 1 and 2
Headline inflation includes the inflation of all sectors and commodities, food and energy as well, which often experience inflationary spikes. It is for this reason that headline inflation may not present an accurate picture of the current state of economy. These inflation spikes are not there to stay all the time and hence distort the inflation numbers. Core inflation, however, does not include food and energy sectors in the measurement of inflation.

flag
Suggest Corrections
thumbs-up
0
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Causes of Poverty
ECONOMICS
Watch in App
Join BYJU'S Learning Program
CrossIcon