The Core inflation is different from the general inflation because of the following?
[A] Core Inflation is caused by the supply Shock in certain essential commodities [B] Core Inflation is the sudden increase in certain items of food grains [C] Core Inflation is the inflation rate of a particular basket of commodities [D] Core Inflation is just a misnomer
Correct Answer: C [Core Inflation is the inflation rate of a particular basket of commodities]
Core Inflation is the rate of inflation calculated to exclude certain items that are subject to sudden and short-lived price movements, mainly food and energy. Core inflation is considered a better indicator of overall long-term than un-adjusted headline inflation.