Question 1

What is inflation?

Accepted Answer

B. Sustained rise in the general price level of goods and services. Inflation is a sustained rise in the general price level of goods and services in an economy over time. It results in a reduction in the purchasing power of money. Mild inflation (2-4%) is generally considered healthy for an economy, stimulating growth, while very high inflation is damaging.

Question 2

CPI stands for:

Accepted Answer

A. Consumer Price Index. CPI stands for Consumer Price Index. It measures the change in the average price of a fixed basket of goods and services typically consumed by urban and rural households. In India, CPI is the official inflation measure for monetary policy since 2014, targeting 4% ±2%.

Question 3

WPI stands for:

Accepted Answer

B. Wholesale Price Index. WPI stands for Wholesale Price Index. It measures the change in prices of goods at the wholesale (producer) level, before they reach consumers. India's WPI uses 2011-12 as the base year and covers 697 commodities. It is published by the Department for Promotion of Industry and Internal Trade (DPIIT).

Question 4

What is the base year for India's CPI?

Accepted Answer

C. 2012. India's Consumer Price Index (CPI) uses 2012 (calendar year) as the base year, where CPI = 100. The CPI with base year 2012 was introduced in January 2015, replacing the earlier CPI with base year 2010. The index measures inflation relative to the price level in 2012.

Question 5

What is the base year for India's WPI?

Accepted Answer

B. 2011-12. India's Wholesale Price Index (WPI) uses 2011-12 as the base year. The base year was revised from 2004-05 to 2011-12, effective from April 2017. The new series covers 697 commodities across primary articles, fuel & power, and manufactured products. DPIIT publishes the WPI monthly.

Inflation: WPI & CPI — Set 1