Question

With reference to Indian economy, consider the following statements:
(1) Three types of Consumer Price Index are used in the determination of Consumer Price Index.
(2) Consumer Price Index of Industrial Worker and Consumer Price Index of Rural Labour has given same weight in the determination of inflation.
Which of the statements given above is/are correct?

• A. Only 1
• B. Only 2
• C. Both 1 and 2
• D. Neither 1 nor 2

Answer 1

The correct option is A Only 1

Three types of CPI indices are computed by the Central Statistics Officer (CSO) - CPI for industrial workers, CPI for agricultural or rural labourers and CPI for rural, urban and combined. The third type of inflation provides a better estimate of the inflation and hence is used for the CPI numbers.