Question

Which of the following correctly distinguishes the Consumer Price Index (CP

Q: Answer-Which of the following correctly distinguishes the Consumer Price Index (CPI), Wholesale Price Index...

CPI measures changes in the retail prices of a fixed basket of goods and services purchased by households. It includes services, imported goods consumed domestically, and reflects the urban and rural consumer experience. It is used by RBIs MPC for inflation targeting. WPI tracks price changes at the wholesale or producer level for goods traded in bulk, covering primary articles, fuel, and manufactured products but typically excluding services. GDP Deflator Nominal GDP Real GDP 100, covering all final goods and services produced within the economy consumption, investment, government spending, and exports but excluding imports. CPI uses a Laspeyres-type index base-year weights, while the GDP Deflator uses a Paasche-type index currentyear weights.

I , Wholesale Price Index (WP
I , and the GDP Deflator?

A CPI covers all goods and services produced; WPI covers only consumer goods; GDP Deflator covers wholesale transactions

B CPI measures price changes from the consumer's perspective including services; WPI tracks prices at the wholesale level excluding services; GDP Deflator covers all domestically produced goods and services but excludes imports

C CPI, WPI, and GDP Deflator are computed using identical baskets and methodologies

D GDP Deflator uses a fixed Laspeyres index, while CPI uses a Paasche index

E WPI is used for monetary policy in India, while CPI is used for fiscal policy

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