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What is the Consumer Price Index (CPI) primarily used for?
  • a)
    Tracking price trends in wholesale goods.
  • b)
    Measuring changes in the purchasing power of money.
  • c)
    Assessing changes in inflation and deflation.
  • d)
    Reflecting fluctuations in the price level of consumer goods and services.
Correct answer is option 'D'. Can you explain this answer?
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What is the Consumer Price Index (CPI) primarily used for?a)Tracking p...
The Consumer Price Index (CPI) is primarily used for reflecting fluctuations in the price level of consumer goods and services. It is an essential tool for assessing changes in inflation and deflation by tracking a representative sample of items purchased by households.
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Read the following passage and answer the questions that follow:The Office of the Economic Adviser, Department for Promotion of Industry and Internal Trade is releasing index numbers of wholesale price in India for the month of June, 2020 (Provisional) and for the month of April, 2020 (Final).In view of the limited transactions of products in the wholesale market in the month of April, 2020, due to spread of Covid-19 pandemic, it has been decided to release the Price Movement of selected Subgroups/Groups of WPI.Provisional figures of Wholesale Price Index (WPI) are released on 14th of every month (or next working day) with a time lag of two weeks of the reference month and compiled with data received from institutional sources and selected manufacturing units across the country. After 10 weeks, the index is finalized and final figures are released and then frozen thereafter.The annual rate of inflation, based on monthly WPI, stood at (– 1.81%) (Provisional) for the month of June, 2020 (over June, 2019) as compared to 2.02% during the corresponding month of the previous year.The index for the primary articles increased by (2.28%) to 139.3 (provisional) in June, 2020 from 136.2 (provisional) for the month of May, 2020. Prices of Crude Petroleum & Natural Gas (16.30%), Food Articles (1.97%) and Non Food Articles (1.71%) increased as compared to May, 2020. Prices of Minerals (– 1.72 %) declined as compared to May 2020.Q. The wholesale price index is created with reference to the ..................... received from institutional sources.

Read the following passage and answer the questions that follow:The Office of the Economic Adviser, Department for Promotion of Industry and Internal Trade is releasing index numbers of wholesale price in India for the month of June, 2020 (Provisional) and for the month of April, 2020 (Final).In view of the limited transactions of products in the wholesale market in the month of April, 2020, due to spread of Covid-19 pandemic, it has been decided to release the Price Movement of selected Subgroups/Groups of WPI.Provisional figures of Wholesale Price Index (WPI) are released on 14th of every month (or next working day) with a time lag of two weeks of the reference month and compiled with data received from institutional sources and selected manufacturing units across the country. After 10 weeks, the index is finalized and final figures are released and then frozen thereafter.The annual rate of inflation, based on monthly WPI, stood at (– 1.81%) (Provisional) for the month of June, 2020 (over June, 2019) as compared to 2.02% during the corresponding month of the previous year.The index for the primary articles increased by (2.28%) to 139.3 (provisional) in June, 2020 from 136.2 (provisional) for the month of May, 2020. Prices of Crude Petroleum & Natural Gas (16.30%), Food Articles (1.97%) and Non Food Articles (1.71%) increased as compared to May, 2020. Prices of Minerals (– 1.72 %) declined as compared to May 2020.Q. Which index number is being prepared by the office of Economic Adviser, Department for Promotion of Industry and Internal Trade?

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What is the Consumer Price Index (CPI) primarily used for?a)Tracking price trends in wholesale goods.b)Measuring changes in the purchasing power of money.c)Assessing changes in inflation and deflation.d)Reflecting fluctuations in the price level of consumer goods and services.Correct answer is option 'D'. Can you explain this answer?
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