Shanta brought milk for herself for ₹100/l in 2020. In 2021, she gets the same quantity of milk for ₹115. She calculated and arrived at a conclusion that there is an inflation in the economy.

By which index did she do her calculation?

Food price index

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Wholesale price index

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Consumer price index

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Price index

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Solution

The correct option is C Consumer price index
The CPI measures the changes in the retail prices of a few selected consumer goods.

Shanta calculated the price change with the help of a consumer price index. She did not use the food price index because the FPI measures the increase in the wholesale prices of food items like rice, pulses, milk, and so on, whereas Shanta is a retail consumer.

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Shanta brought milk for herself for ₹100/l in 2020. In 2021, she gets the same quantity of milk for ₹115. She calculated and arrived at a conclusion that there is an inflation in the economy. By which index did she do her calculation?

Shanta brought milk for herself for ₹100/l in 2020. In 2021, she gets the same quantity of milk for ₹115. She calculated and arrived at a conclusion that there is an inflation in the economy.

By which index did she do her calculation?