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Consider the following statements.
  1. Core inflation is a measure of the total inflation within an economy, including commodities such as food and energy prices.
  2. Core inflation typically rises and falls more gradually than inflation in food and fuel.
  3. The Eight Core Industries comprise nearly two-third of the weight of items included in the IIP.
How many of the above statements are correct?
  • a)
    Only one 
  • b)
    Only two 
  • c)
    All three 
  • d)
    None
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements. Core inflation is a measure of the ...
Only Statement 2 is correct.
  • Core inflation — that is the inflation rate when prices of food and fuel are taken awayCore inflation typically rises and falls more gradually than inflation in food and fuel.
  • Eight core industrial sectors that support infrastructure such as coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity have a total weight of nearly 40% in the Index of Industrial Production (IIP).
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Community Answer
Consider the following statements. Core inflation is a measure of the ...

Explanation:

Core Inflation:
- The first statement is incorrect. Core inflation is a measure of inflation that excludes certain items that face volatile price movements, such as food and energy prices.
- Core inflation gives a more accurate picture of underlying inflation trends in an economy by excluding these volatile components.

Core Inflation Stability:
- The second statement is correct. Core inflation typically rises and falls more gradually than inflation in food and fuel.
- This is because food and fuel prices tend to be more volatile due to factors such as weather conditions and geopolitical events.

Eight Core Industries:
- The third statement is incorrect. The Eight Core Industries refer to a specific set of industries that are considered crucial for the overall growth and development of an economy.
- These industries include coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity.
- They do not comprise nearly two-thirds of the weight of items included in the Index of Industrial Production (IIP).

Therefore, only the second statement is correct, making the correct answer option 'A' - Only one.
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Consider the following statements. Core inflation is a measure of the total inflation within an economy, including commodities such as food and energy prices. Core inflation typically rises and falls more gradually than inflation in food and fuel. The Eight Core Industries comprise nearly two-third of the weight of items included in the IIP.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'A'. Can you explain this answer?
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