The price index values used to calculate headline and core inflation for 2012 through 2016 are found in the table below:
S1 annual inflation rate
S2 annual inflation rates
b. Which series represents core inflation?
a . S1
- 4.5
-7.8
-2.8
8.4
S2
- 1.6
-1.3
-1.8
-1.7
b Core inflation removes food and energy prices so we expect less fluctuation from year to year—Series 2.
Correct
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