In the context of inflation, 'Headline Inflation' typically refers to:
A. Only food inflation
B. Overall inflation including all items in the basket
C. Inflation excluding food and fuel
D. Only fuel inflation
Answer: Option B
Solution (By JKSSB Mock Tests)
Headline inflation measures the total inflation in an economy, including all items such as food, fuel and others. Core inflation excludes volatile items like food and fuel.
Explanation:
Transfer payments are unilateral payments for which no goods or services are received in return, such as pensions, scholarships and unemployment allowances. Interest on borrowings is also a transfer, but pension is a classic example.
Explanation:
The fiscal multiplier is the ratio of the change in real GDP to an exogenous change in the fiscal instrument (government purchases or taxes).
Explanation:
The cost of production influences the supply side. Price elasticity of demand depends on substitutes, nature of the good, proportion of income spent, time and habits.
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