Question

2 items from the cpi basket which are excluded when measuring core inflation

Answer 1

Answer:

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Answer 2

ANSWER:

The two items which are excluded from CPI basket are the food and energy sectors.

EXPLANATION:

      Core inflation takes into account the changes in the cost of "goods and services" but it does not include the "food and energy sectors". The core inflation does not measure inflation of these two items since their prices are very volatile.

      It is often calculated by the CPI measures. Normally "core inflation" is measured by CPI and core personal consumption index (PCE).