Measuring the Rate of Inflation Using a Market Basket That

question 16

Multiple Choice

Measuring the rate of inflation using a market basket that excludes food and energy prices is preferred by some analysts because this measure, called core inflation,

• A) provides a real, rather than a nominal, rate of inflation.
• B) gives a better measure of ongoing, sustained price changes.
• C) is more consistent with measures of inflation used in other countries.
• D) fluctuates more than measures of inflation that include food and energy prices.

---

Definitions:

Western Coast

The land along the western edge of a continent that borders an ocean or sea.

Eastern Coast

Refers to the eastern seaboard or boundary of a continent or country, facing an ocean or sea.

Air Masses

Large volumes of air defined by their temperature and humidity characteristics, forming the basis of weather patterns.

Equator

The Equator is an imaginary line around the Earth's surface located equidistant from the North and South Poles, dividing the Earth into the Northern and Southern Hemispheres.