Question

Differentiate between core and headline inflation. which one is the preferred measure of inflation by central...

Differentiate between core and headline inflation. which one is the preferred measure of inflation by central bankers and why?
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Inflation:- Inflation means a contineous increase in the general price in the economy. Inflation in other words means too much money chasing too few goods. The purchasing power of money is decreasing. A person is not able to buy too much during inflation. There are two types of inflation that is demand pull and cost push inflation. Inflation is a situation of rising prices in the economy. A more exact definition of inflation is a sustained increase in the general price level in an economy. Inflation means an increase in the cost of living as the price of goods and services rise. The central bank of US that is fed, uses the core inflation to measure the inflation.

Kindly find attachment for detailed explanation...

Thanks!

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Which is a more meaningful measure of "inflation" - the one using the headline CPI-U...
1. Which is a more meaningful measure of "inflation" - the one using the headline CPI-U (including energy and food prices) or the one using "core" CPI-U (excluding energy and food prices)? Why? From which perspective?
Use the table below to calculate core and headline inflation in each time frame relative to...
Use the table below to calculate core and headline inflation in each time frame relative to the base year, assuming that each category is weighted equally in the calculation of headline inflation. Instructions: Round your answers to the nearest whole number. Food and energy Other goods and services Core inflation (relative to base year) Headline inflation (relative to base year) 2012 118 104 % % 2016 103 105 % % Instructions: Round your answers to one decimal place. Core inflation...
1.)The PCE is preferred to the CPI as a measure of inflation because the CPI is...
1.)The PCE is preferred to the CPI as a measure of inflation because the CPI is quarterly while the PCE is monthly the PCE does not have the biases created by a fixed basket measure the PCE measures prices for all types of goods the PCE measures prices for the most important consumer goods 2) Since the Great Recession, inflation rates have rarely been above .5% 1% 1.5% 2.5% 3.) Currently, a real GDP growth rate of approximately 5% would...
Assume that there is a short-run tradeoff between inflation and unemployment, that the central bank desires...
Assume that there is a short-run tradeoff between inflation and unemployment, that the central bank desires both low inflation and low unemployment, and that the central bank uses discretion in conducting monetary policy. Initially, households and firms expect high inflation. Following an announcement by the central bank of a low-inflation policy, households and firms will ______ the central bank's announcement and ______ their expectations of inflation. believe; not change not believe; not change not believe; lower believe; lower
which of the following statements about inflation targeting is true? a. inflation targeting by the central...
which of the following statements about inflation targeting is true? a. inflation targeting by the central bank's in other countries has not typically lowered inflation b. inflation targeting would not reduce the flexibility of monetary policy to address other policy c. inflation targeting would not allow the Central Bank the flexibility to take action agaiinflation targeting would make it easier for households and firms to form accurate expectations of future inflation and proven their planning in the efficiency of the...
a) What is inflation rate targeting? b) Differentiate between a fixed and flexible exchange rate. (ii)...
a) What is inflation rate targeting? b) Differentiate between a fixed and flexible exchange rate. (ii) Determine the effects if monetary policy is used to stabilize the economy (iii) Determine the effects if fiscal policy is used to stabilize the economy.
Which is easier for the European Central Bank to control: inflation or unemployment? Discuss.
Which is easier for the European Central Bank to control: inflation or unemployment? Discuss.
Sociology Question Differentiate between the concepts of "sex" and "gender." What does it mean to say...
Sociology Question Differentiate between the concepts of "sex" and "gender." What does it mean to say that gender is "socially constructed"? In your view, which of the two concepts is more central to the identity of an individual?
Which measure of central tendency is calculated by adding the values and dividing by the number...
Which measure of central tendency is calculated by adding the values and dividing by the number of values? Mode Median Arithmetic mean range
Which of the following is a measure of central tendency? A. Variance B. Standard Deviation C....
Which of the following is a measure of central tendency? A. Variance B. Standard Deviation C. Mean D. Correlation Coefficient
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT