Loading...
UPSC 2020: 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?
(a)1 and 2 only
(b)2 only
(c)3 only
(d)1, 2 and 3
Attempt This Question
Not attemptedCorrect Answer: (a) 1 and 2 only
Food has a much higher weight in CPI (~40-46 %) than in WPI (~15-24 %), so statement 1 is true. WPI tracks only goods prices, whereas CPI includes services, making statement 2 true. RBI’s inflation-targeting framework since 2014 uses CPI-Combined, not WPI, so statement 3 is false. Therefore only statements 1 and 2 are correct. ([financialexpress.com](https://www.financialexpress.com/policy/economy-high-cpi-inflation-falling-wpi-inflation-show-pressure-on-households-cheer-for-industry-wheres-money-going-3010596/?utm_source=openai))
Related Current Affairs
Related UPSC Questions
More from Inflation & Price Indices
2015easy
Which of the following brings out the ‘Consumer Price Index Number for Industrial Workers’?
2015easy
With reference to inflation in India, which of the following statements is correct?
2013easy
Consider the following statements : 1. Inflation benefits the debtors. 2. Inflation benefits the bond-holders. Which of the statements given above is/
Frequently Asked Questions
What is the correct answer to this UPSC 2020 Indian Economy question?▼
The correct answer is option (a): 1 and 2 only. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Inflation & Price Indices question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2020, GS Paper 1, as Question 67. It falls under Indian Economy > Inflation & Price Indices.
What is the difficulty level of this UPSC question?▼
This question is rated "easy". It tests basic recall and most well-prepared aspirants should answer it correctly.
How many UPSC Prelims questions have been asked from Inflation & Price Indices?▼
UPSC has asked 15 questions from Inflation & Price Indices (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.