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15 questions from UPSC CSE Prelims GS Paper 1 on Inflation & Price Indices (Indian Economy). Spanning from 1997 to 2020. Practice with show/hide answers and detailed explanations.
15
Questions
9
Years
9
Easy
6
Moderate
Q: Consider the following statements: 1. The weight of food items is higher in the Consumer Price Index (CPI) than in the Wholesale Price Index (WPI). 2. WPI does not capture changes in the prices of services, whereas CPI does. 3. The Reserve Bank of India has adopted WPI for its primary measure of inflation and for deciding key policy rates. Which of the statements given above is/are correct?
Q: Which of the following brings out the ‘Consumer Price Index Number for Industrial Workers’?
Q: With reference to inflation in India, which of the following statements is correct?
Q: Consider the following statements : 1. Inflation benefits the debtors. 2. Inflation benefits the bond-holders. Which of the statements given above is/are correct?
Q: A rise in general level of prices may be caused by 1. an increase in the money supply 2. a decrease in the aggregate level of output 3. an increase in the effective demand Select the correct answer using the codes given below.
Q: India has experienced persistent and high food inflation in the recent past. What could be the reasons? 1. Due to a gradual switchover to the cultivation of commercial crops, the area under the cultivation of food grains has steadily decreased in the last five years by about 30%. 2. As a consequence of increasing incomes, the consumption patterns of the people have undergone a significant change. 3. The food supply chain has structural constraints. Which of the statements given above are correct?
Q: A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “base effect”?
Q: Economic growth is usually coupled with
Q: Which one of the following statements is an appropriate description of deflation ?
Q: With reference to India, consider the following statements: 1. The Wholesale Price Index (WPI) in India is available on a monthly basis only. 2. As compared to Consumer Price Index for Industrial Workers (CPI(IW)), the WPI gives less weight to food articles. Which of the statements given above is/are correct?
Q: With reference to the Wholesale Price Index (WPI), consider the following statements: 1. The new WPI series with base 1993-94 = 100 became effective from April 1998. 2. In the new WPI series, became effective from 1 April 2000. 3. The weight for electricity has increased in the new WPI series. Which of these statements are correct?
Q: The new series of Wholesale Price Index (WPI) released by the Government of India is with reference to the base prices of
Q: The misery index is the sum of a country’s unemployment and inflation rate. The higher the index, the more miserable is the country to live in. In the figure given below is the Misery Index for various countries in Europe: Which of the following conclusions can be drawn from the misery index given above? I. Britain is the most miserable country to live in. II. The inflation rate in Spain is less than that in Belgium and Britain. III. Italy and France seem to have almost identical unemployment rate. IV. The higher the misery index, the higher the inflation rate. Select the correct answer using the codes given below:
Q: The current price index (base 1960) is nearly 330. This means that
Q: In India, inflation is measured by the
No. UPSC sticks to national indices like CPI-Combined, CPI-IW and WPI. However, understand which ministry publishes each index and their respective base years.
Not usually. Focus on the statutory framework—Section 45ZB, composition of the MPC, and the meaning of ‘failure to achieve the target’—rather than individual member votes.
