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    Question

    Which of the following tools are helpful to gauge

    inflation in India?
    A Consumer Price Index Correct Answer Incorrect Answer
    B Wholesale Price Index Correct Answer Incorrect Answer
    C Multidimensional Poverty Index Correct Answer Incorrect Answer
    D Both a & b Correct Answer Incorrect Answer
    E Both b & c Correct Answer Incorrect Answer

    Solution

    The WPI and CPI are the main price indices in India. The WPI measures prices received by producers of goods, while the CPI measures prices facing consumers at the retail level. The weighting schemes, coverage of goods and the prices used are very different between the two indices, which can lead to quite different rates of inflation.

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