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The Fed Uses a "Core" Price Index,one That Excludes Food

Question 147

Multiple Choice

The Fed uses a "core" price index,one that excludes food and energy prices to measure inflation.It does so because


A) food and energy have inelastic demand curves and consumers will buy them regardless of their price.
B) it wants to avoid the blame for high gasoline prices causing inflation.
C) food and energy prices have wide swings that are not related to the causes of general inflation.
D) food and energy prices do not change all that much during the short run,so are irrelevant to the calculation of inflation.

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