An advantage of the overall inflation rate over core inflation refers to the fact that O monetary authorities directly control the overall inflation rate, but not core inflation. O including the fluctuations in the prices of food and energy in a measure of inflation can provide signals about future prices in the economy. O core inflation is more volatile and, thus, generates more uncertainty about the economy. including the fluctuations in the prices of food and energy can distort information and lead us to wrong inferences.
An advantage of the overall inflation rate over core inflation refers to the fact that O monetary authorities directly control the overall inflation rate, but not core inflation. O including the fluctuations in the prices of food and energy in a measure of inflation can provide signals about future prices in the economy. O core inflation is more volatile and, thus, generates more uncertainty about the economy. including the fluctuations in the prices of food and energy can distort information and lead us to wrong inferences.
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: Money Growth And Intlation
Section: Chapter Questions
Problem 6CQQ
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