The term 'Core Inflation' is useful for policy makers because it:
A. Includes all volatile items
B. Measures only food inflation
C. Excludes food and fuel prices to reveal underlying inflation trends
D. Is always higher than headline inflation
Answer: Option C
Solution (By JKSSB Mock Tests)
Core inflation excludes volatile components such as food and energy, providing a clearer picture of persistent inflationary pressures for monetary policy decisions.
Explanation:
Merit goods are those that the government feels people will under-consume and which ought to be subsidised or provided free, such as education and healthcare.
Explanation:
A capitalist (market) economy is characterised by private ownership of the means of production, profit motive, and resource allocation through the market mechanism.
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