| Consider the following statements |
| 1. Headline inflation is a measure of the total inflation within an economy. |
| 2. Headline inflation is affected by areas of the market which may experience sudden inflationary spikes such as food, vegetables or energy. Which of the statements given above is/are correct? |
A) Only 1
B) Only 2
C) Both 1 and 2
D) neither 1 nor 2
Correct Answer: C
Solution :
Headline inflation is a measure of the total inflation within an economy, including commodities such as food and energy prices (e.g., oil and gas), which tend to be much more volatile and prone to inflationary spikes.
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