196.Core inflation is more stable than headline inflation because the two most volatile components are not included in core inflation.
197.The consumer price index measures the average change in prices paid by urban consumers and urban wage earners for a market basket of goods and services, covering roughly 87% of the population.
198.The consumer price index measures both private goods and services and public goods and services.A)TrueB)False
199.The general formula for an escalator clause adjustment is: new = original × (original yearindex / current year index).
200.A consumer price index change from 130 to 135 reflects a 3.85% inflation rate.
201.The formula for price change is: [(CPI in Current Year / CPI in Original Year) × 100] – 100 = Percent Change in Price.
202.Escalator clauses are important in times of rising inflation because they protect the real value of wages.A)TrueB)False