Related to the Economics in Practice on p. 223: Which measure of the aggregate price level does the Fed consider the most important?
A) the Core PCE
B) the CPI
C) the GDP deflator
D) the PPI

Question

Quizplus · Accepted Answer

The Fed considers the Core PCE (Personal Consumption Expenditure Price Index) as the most important measure of the aggregate price level because it excludes the volatile food and energy prices and closely reflects the prices that consumers actually pay for goods and services. The Fed uses this measure to assess inflationary pressures and adjust monetary policy accordingly.

Related to the Economics in Practice on P