2017 · Q44
Core inflation is different from headline inflation because the former
Indian EconomyInflation and external sector
- Aignores articles of volatile nature in the price index
- Bconsiders articles of volatile nature in the price index
- Cis not based on commodity price index
- Dconsiders only core items of consumption in the price index
Explanation
Core inflation is headline inflation stripped of volatile components, chiefly food and fuel, so that the underlying price trend is visible. Including volatile articles (B) describes headline inflation, and core inflation is still based on a commodity price index of core items, so C and D are wrong. Hence A.