Question

In general, inflation is calculated by using

(i) wholesale price index

(ii) consumer price index

(iii) producer's price index

Answer 1

(i) The WPI is widely used to measure the rate of inflation. The weekly inflation rate is given by

$\frac{X_l-X_{l-1}}{X_l-1}\times 100$

where $X_l$ and $X_{l-1})$ refer to the WPI for the (t) th and (t-1) th weeks.