Typically, inflation is calculated by a central bank based on:

Inflation measures the rate at which the general price level of goods and services rises, reducing purchasing power.

Why is Option C Correct?

Inflation is measured using Consumer Price Indices (CPI), which track the cost of a fixed basket of goods and services over time.

The basket includes food, housing, transportation, healthcare, and other essential expenses.

Why Not Other Options?

A (Survey of banks) → Banks may provide economic forecasts, but inflation is not calculated this way.

B (Interest rates) → Central banks adjust interest rates in response to inflation but do not use them to calculate it.

D (Commodities only) → Inflation measures overall price levels, not just commodities.

???? Reference: UK Office for National Statistics (ONS) - Inflation Measurement, CISI Wealth & Investment Management.