Core Inflation Is an Important Statistic Because

question 112

Multiple Choice

Core inflation is an important statistic because:

• A) food and energy costs fluctuate frequently and can distort actual changes in the cost of living.
• B) the prices of retail consumption items fluctuate frequently and can distort actual changes in the cost of living.
• C) it is measured more regularly than headline inflation.
• D) the prices of durable goods fluctuate more frequently than the prices of nondurable goods and can distort actual changes in the cost of living.

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Definitions:

Business Cycle

The natural rise and fall of economic growth that occurs over time, consisting of periods of expansion, peak, contraction, and trough.

Fiscal Year

A government's or organization's financial year used for accounting purposes, which may not necessarily align with the calendar year.

Multiplier

In economics, a factor by which a change in spending will be magnified in the overall economy, affecting output and income levels.

MPC

Marginal Propensity to Consume, which measures the proportion of additional income that an individual spends on consumption.