Which measure of inflation best reflects changing prices for the average consumer?
A. Headline inflation
B. Core inflation
C. Hyper inflation
D. Nominal inflation
A. Headline inflation
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A person who uses a rule of thumb to determine the best rate of savings:
A. is necessarily making a mistake, since finding the best rate of savings involves complex mathematical models. B. is necessarily making a mistake, since there is no single best rate of savings. C. is not necessarily making a mistake because rules of thumb often arise out of trial and error or from observation of others' successful decisions. D. is not necessarily making a mistake because, in the long run, all rates of savings turn out to yield the same economic benefit.
Price ceilings and price floors:
A. make the rationing function of markets more efficient. B. interfere with the allocation function of prices. C. cause surpluses and shortages in markets respectively. D. cause demand and supply curves to shift thus having no effect on the rationing function of prices.