The consumer price index (CPI) is a means to measure the weighted average cost of consumer bags of goods and services such as food, medical care, and transportation.
It is evaluated by taking a cost change of each product in the prearranged bags of goods and averaging them. The CPI changes are applied to estimate the price changes linked to the cost of living in the economy. The CPI is one of the most commonly used statistics for locating inflation or deflation periods.
Given below are essential MCQs on Consumer Price Index (CPI) to analyse your understanding of the topic. The answers are also given for your reference.
Consumer Price Index (CPI) MCQs:
Q.1 Which index in India is used to evaluate inflation?
A) Commodity price index
B) Productive price index
C) GDP deflator
D) Wholesale price index
Answer: D
Q.2 Who releases the figures of the wholesale price index?
A) Ministry of Commerce and Industry
B) Ministry of Finance
C) Ministry of Home Affairs
D) Ministry of Statistics and Program Implementation
Answer: A
Q.3 What does the consumer price index (CPI) calculate?
A) Price of services only
B) Price of goods only
C) Price of both goods and services
D) None of the above
Answer: C
Q.4Â How often is the data of the consumer price index (CPI) released?
A) Every day
B) Every year
C) Every month
D) Every week
Answer: C
Q.5 Who issues the data of the consumer price index (CPI)?
A) Ministry of Commerce and Industry
B) Ministry of Finance
C) Ministry of Statistics and Program Implementation
D) None of the above
Answer: C
Q.6 What is the base year of the consumer price index (CPI)?
A) 2001
B) 2012
C) 2004
D) 2015
Answer: B
Q.7 When is the wholesale price index (WPI) based inflation evaluated?
A) An intermediate stage of production
B) The final stage of a transaction
C) The first stage of a transaction
D) None of the above
Answer: C
Q.8 How many products are included in the wholesale price index (WPI)?
A) 220
B) 710
C) 556
D) 697
Answer: D
Q.9 What is the base year for the wholesale price index (WPI)?
A) 2014–2015
B) 2011–2012
C) 2001–2002
D) 2004–2005
Answer: B
Q.10 Raghu spends cash on rice, tuition fee, and flour. In this scenario, which index is used to estimate the average of the entire expenses?
A) Producer price index
B) Consumer price index
C) Productive price index
D) Wholesale price index
Answer: B
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