Q. Which of the following would be included in the calculation of core inflation?

[A] The price of fruits and vegetables

[B] The price of crude oil

[C] The price of medical services

[D] The price of gasoline

Answer: C
Notes:

Explanation:

  • Core inflation measures the change in the costs of goods and services, but it excludes volatile items that are subject to frequent price swings, most notably food and energy prices.
  • Items like fruits, vegetables, crude oil, and gasoline are excluded because their prices can fluctuate wildly due to seasonal factors, geopolitical events, or supply shocks, which can give a misleading picture of underlying inflationary trends.
  • The price of medical services is considered a more stable component of the overall price index and is therefore included in the calculation of core inflation.
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