What does the term headline inflation include in its calculation?
A. Only food and energy prices
B. All items in the consumer market basket
C. Only housing and transportation
D. All producer prices
Answer (1)
The correct answer is letter B. All items in the consumer market basketHeadline inflation refers to the overall measure of inflation that includes the full range of items that consumers typically purchase, including food, energy, housing, clothing, healthcare, and transportation. It is called "headline" because it represents the broadest picture of price changes and is the most reported in the news.In the Philippines, the Philippine Statistics Authority (PSA) releases monthly headline inflation data. For example, if gasoline prices increase sharply due to a global oil crisis, and the price of rice or electricity also goes up, these are all included in headline inflation. This makes headline inflation more sensitive to short-term price shocks like typhoons affecting vegetable supply or fuel price hikes due to international events.
