[Solved] Which of the following statements about the Consumer Price Index (CPI) is correct? — Ans: CPI reflects changes in retail prices paid by consumers | Economic Awareness

Economic Awareness - Sectors of Indian Economy

Which of the following statements about the Consumer Price Index (CPI) is correct?

ACPI measures wholesale price changes in the economy

BCPI includes prices of capital goods and intermediate goods

CCPI reflects changes in retail prices paid by consumers

DCPI is used to calculate the fiscal deficit

Step-by-Step Solution

Step 1: Identify the role of CPI
CPI measures changes in retail prices paid by consumers for goods and services.
Step 2: Analyze options
Wholesale prices are measured by WPI, not CPI. Capital and intermediate goods are excluded from CPI basket. Fiscal deficit is unrelated to CPI.
Final Answer:
CPI reflects changes in retail prices paid by consumers → Option C
Quick Check:
CPI reflects retail prices paid by consumers ✅

Quick Trick: Remember CPI = retail prices; WPI = wholesale prices.

Common Mistakes:

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