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Newspaper and government sources often cite ‘core’ CPI, a Consumer Price Index that does not include volatile items like gasoline and food. Why is this a misleading measure? (A) It can overstate inflation. (B) It can understate inflation. (C) It misrepresents the volatility of consumer prices. (D) All of the above.

Newspaper and government sources often cite ‘core’ CPI, a Consumer Price Index that does not include volatile items like gasoline and food. Why is this a misleading measure? (A) It can overstate inflation. (B) It can understate inflation. (C) It misrepresents the volatility of consumer prices. (D) All of the above.

ECON MACRO
ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter7: Unemployment And Inflation
Section: Chapter Questions
Problem 3.7P
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24. Newspaper and government sources often cite ‘core’ CPI, a Consumer Price Index
that does not include volatile items like gasoline and food. Why is this a misleading
measure?
(A) It can overstate inflation.
(B) It can understate inflation.
(C) It misrepresents the volatility of consumer prices.
(D) All of the above.

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Newspaper and government sources often cite `core' CPI, a Consumer Price Index

that does not include volatile items like gasoline and food. Why is this a misleading

measure?

 

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