What makes core CPI different from headline CPI?
A. Core CPI includes international prices
B. Core CPI excludes food and energy prices
C. Core CPI only tracks luxury goods
D. Core CPI does not change over time
Answer (2)
The correct answer is letter B. Core CPI excludes food and energy pricesCore CPI is a version of the Consumer Price Index that removes food and energy prices, which tend to change a lot from month to month. These prices are often affected by weather, oil prices, or even international events. For example, a typhoon in Luzon might suddenly raise vegetable prices, or a war in Europe might affect fuel costs.Economists and the BSP prefer core CPI for making long-term decisions because it gives a clearer view of inflation without short-term spikes. It helps them know whether inflation is really increasing or just being temporarily pushed by factors like high onion or oil prices.
The correct answer is B. Core CPI excludes food and energy prices.Core CPI is a measure of the Consumer Price Index that excludes the prices of food and energy because these prices tend to be very volatile and can fluctuate widely in the short term. By excluding these categories, core CPI provides a clearer picture of the underlying, long-term inflation trends. Headline CPI, on the other hand, includes all items, including food and energy.
