Headline Inflation Is

question 96

Multiple Choice

Headline inflation is:

• A)core inflation with the prices of food and gasoline added in.
• B)overall inflation in the economy.
• C)used only by the media for discussing inflation.
• D)All of these statements are true.

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Definitions:

Risk-Free Asset

An asset that supposedly carries no risk of financial loss and is expected to return its full value along with known interest or dividends.

Risky Asset

A financial instrument whose future returns are uncertain and subject to a wide variety of outcomes.

Capital Allocation Line

A graphical representation used in finance to show possible rates of return for portfolios with different levels of risk.

Lending Rate

The interest rate charged by banks on loans extended to clients.