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In India, inflation measured by the
- a)Wholesale Price Index number
- b)Consumers Price Index for urban non-manual workers
- c)Consumers Price Index for agricultural workers
- d)National Income Deflation
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
In India, inflation measured by thea)Wholesale Price Index numberb)Con...
Two major measures for inflation, which are widely used, are Wholesale Price Index (WPI) and Consumer Price Index (CPI). WPI measures the increase in the prices of a fixed basket of goods prevailing in the wholesale market while CPI measures the increase in the prices of essential commodities purchased by an average consumer prevailing in the retail market. Measured weekly, WPI is the primary inflation measure in India.
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In India, inflation measured by thea)Wholesale Price Index numberb)Con...
In India, inflation is measured using various indices, but the most commonly used index is the Wholesale Price Index (WPI). Let's understand why option 'A' is the correct answer.
The Wholesale Price Index (WPI) measures the average change in the prices of goods at the wholesale level. It includes a basket of goods and commodities that are traded in bulk by businesses. WPI is published by the Office of Economic Adviser, Ministry of Commerce and Industry, Government of India.
Now, let's discuss the other options and why they are not the correct answers:
b) Consumers Price Index for urban non-manual workers:
The Consumer Price Index (CPI) is a measure of average price changes over time in a fixed basket of goods and services consumed by households. However, the CPI for urban non-manual workers is specific to a particular section of the population and does not represent the overall inflation in the country.
c) Consumers Price Index for agricultural workers:
Similar to the previous option, the CPI for agricultural workers is specific to a particular section of the population and does not capture the overall inflation in the country.
d) National Income Deflation:
National Income Deflation is not a measure of inflation. It refers to a decrease in the overall income of a nation over a period of time, which is different from measuring the price levels of goods and services.
Therefore, the correct answer is option 'A' - Wholesale Price Index (WPI). WPI is widely used in India to monitor and analyze inflationary trends. It takes into account a comprehensive range of goods and commodities, making it a reliable indicator of inflation in the country.
Using the WPI, policymakers, economists, and businesses can assess the impact of inflation on the economy, make informed decisions regarding monetary and fiscal policies, and predict future trends. It helps in understanding the price movements at the wholesale level, which eventually affect the prices faced by consumers.
In conclusion, the Wholesale Price Index (WPI) is the preferred measure of inflation in India as it provides a comprehensive view of price movements in the wholesale market. It is widely recognized and used by various stakeholders to monitor and analyze inflationary trends in the country.
The Wholesale Price Index (WPI) measures the average change in the prices of goods at the wholesale level. It includes a basket of goods and commodities that are traded in bulk by businesses. WPI is published by the Office of Economic Adviser, Ministry of Commerce and Industry, Government of India.
Now, let's discuss the other options and why they are not the correct answers:
b) Consumers Price Index for urban non-manual workers:
The Consumer Price Index (CPI) is a measure of average price changes over time in a fixed basket of goods and services consumed by households. However, the CPI for urban non-manual workers is specific to a particular section of the population and does not represent the overall inflation in the country.
c) Consumers Price Index for agricultural workers:
Similar to the previous option, the CPI for agricultural workers is specific to a particular section of the population and does not capture the overall inflation in the country.
d) National Income Deflation:
National Income Deflation is not a measure of inflation. It refers to a decrease in the overall income of a nation over a period of time, which is different from measuring the price levels of goods and services.
Therefore, the correct answer is option 'A' - Wholesale Price Index (WPI). WPI is widely used in India to monitor and analyze inflationary trends. It takes into account a comprehensive range of goods and commodities, making it a reliable indicator of inflation in the country.
Using the WPI, policymakers, economists, and businesses can assess the impact of inflation on the economy, make informed decisions regarding monetary and fiscal policies, and predict future trends. It helps in understanding the price movements at the wholesale level, which eventually affect the prices faced by consumers.
In conclusion, the Wholesale Price Index (WPI) is the preferred measure of inflation in India as it provides a comprehensive view of price movements in the wholesale market. It is widely recognized and used by various stakeholders to monitor and analyze inflationary trends in the country.
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In India, inflation measured by thea)Wholesale Price Index numberb)Consumers Price Index for urban non-manual workersc)Consumers Price Index for agricultural workersd)National Income DeflationCorrect answer is option 'A'. Can you explain this answer?
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