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Consider the following statements regarding the Wholesale price index (WPI):
1. It is published by the Economic Advisor in the Ministry of Commerce and Industry.
2. Fuel and power are given highest weightage in it.
3. It tracks inflation at the producer level only.
4. It does not capture changes in the prices of services.
Which of the statements given above is/are not correct?
- a)2 only
- b)1 and 4 only
- c)2 and 3 only
- d)3 and 4 only
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements regarding the Wholesale price index ...
- The Wholesale Price Index (WPI) reflects changes in the average prices of goods at the wholesale level — that is, commodities sold in bulk and traded between businesses or entities rather than goods bought by consumers.
- WPI captures the price changes at the point of bulk transactions and may include some taxes levied and distribution costs up to the stage of wholesale transactions. Hence statement 3 is not correct.
- There are certain limitations in using WPI as a measure for inflation, as WPI does not consider the price of services, and it does not reflect the consumer price situation in the country. The wholesale market is only for goods, you cannot buy services on a wholesale basis. So WPI does not include services. Hence statement 4 is correct.
- WPI is released by the Economic Advisor in the Ministry of Commerce and Industry. The purpose of WPI is to inspect movement in prices of goods that reflect supply and demand in industry, construction and manufacturing. Hence statement 1 is correct.
- The index basket of WPI categorises commodities under three groups — primary articles, fuel and power & manufactured products. The biggest basket is Manufactured Goods. It spans across a variety of manufactured products such as Textiles, Apparels, Paper, Chemicals, Plastic, Cement, Metals, and more. Hence statement 2 is not correct.
- In April 2017, the government revised the base year for WPI from 2004-05 to 2011-12. WPI is extensively used for short-term policy intervention as it is the only index that is available on a weekly basis.
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Consider the following statements regarding the Wholesale price index ...
Incorrect statements regarding Wholesale Price Index (WPI)
Statement 2: Fuel and power are given highest weightage in WPI
This statement is incorrect. The Wholesale Price Index (WPI) gives highest weightage to primary articles, followed by fuel and power, and then manufactured products. Therefore, fuel and power do not have the highest weightage in the WPI.
Statement 3: It tracks inflation at the producer level only
This statement is incorrect. The Wholesale Price Index (WPI) tracks inflation at the wholesale level, which includes both producers and wholesalers. It measures the changes in the prices of goods at various stages before the retail level.
Therefore, the correct answer to the question is option 'C' - Statements 2 and 3 are not correct.
Statement 2: Fuel and power are given highest weightage in WPI
This statement is incorrect. The Wholesale Price Index (WPI) gives highest weightage to primary articles, followed by fuel and power, and then manufactured products. Therefore, fuel and power do not have the highest weightage in the WPI.
Statement 3: It tracks inflation at the producer level only
This statement is incorrect. The Wholesale Price Index (WPI) tracks inflation at the wholesale level, which includes both producers and wholesalers. It measures the changes in the prices of goods at various stages before the retail level.
Therefore, the correct answer to the question is option 'C' - Statements 2 and 3 are not correct.
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Consider the following statements regarding the Wholesale price index (WPI):1. It is published by the Economic Advisor in the Ministry of Commerce and Industry.2. Fuel and power are given highest weightage in it.3. It tracks inflation at the producer level only.4. It does not capture changes in the prices of services.Which of the statements given above is/are not correct?a)2 onlyb)1 and 4 onlyc)2 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer?
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Consider the following statements regarding the Wholesale price index (WPI):1. It is published by the Economic Advisor in the Ministry of Commerce and Industry.2. Fuel and power are given highest weightage in it.3. It tracks inflation at the producer level only.4. It does not capture changes in the prices of services.Which of the statements given above is/are not correct?a)2 onlyb)1 and 4 onlyc)2 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding the Wholesale price index (WPI):1. It is published by the Economic Advisor in the Ministry of Commerce and Industry.2. Fuel and power are given highest weightage in it.3. It tracks inflation at the producer level only.4. It does not capture changes in the prices of services.Which of the statements given above is/are not correct?a)2 onlyb)1 and 4 onlyc)2 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding the Wholesale price index (WPI):1. It is published by the Economic Advisor in the Ministry of Commerce and Industry.2. Fuel and power are given highest weightage in it.3. It tracks inflation at the producer level only.4. It does not capture changes in the prices of services.Which of the statements given above is/are not correct?a)2 onlyb)1 and 4 onlyc)2 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer?.
Consider the following statements regarding the Wholesale price index (WPI):1. It is published by the Economic Advisor in the Ministry of Commerce and Industry.2. Fuel and power are given highest weightage in it.3. It tracks inflation at the producer level only.4. It does not capture changes in the prices of services.Which of the statements given above is/are not correct?a)2 onlyb)1 and 4 onlyc)2 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding the Wholesale price index (WPI):1. It is published by the Economic Advisor in the Ministry of Commerce and Industry.2. Fuel and power are given highest weightage in it.3. It tracks inflation at the producer level only.4. It does not capture changes in the prices of services.Which of the statements given above is/are not correct?a)2 onlyb)1 and 4 onlyc)2 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding the Wholesale price index (WPI):1. It is published by the Economic Advisor in the Ministry of Commerce and Industry.2. Fuel and power are given highest weightage in it.3. It tracks inflation at the producer level only.4. It does not capture changes in the prices of services.Which of the statements given above is/are not correct?a)2 onlyb)1 and 4 onlyc)2 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer?.
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