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What does the Consumer Price Index (CPI) basket typically exclude?

easy Q2 of 15
Economic Awareness - Sectors of Indian Economy
What does the Consumer Price Index (CPI) basket typically exclude?
AConsumer goods and services
BCapital goods and intermediate goods
CFood and beverages
DHousing and fuel
Step-by-Step Solution
  1. Step 1: Understand CPI basket composition

    CPI basket includes goods and services consumed by households, such as food, beverages, housing, and fuel.
  2. Step 2: Identify exclusions

    Capital goods and intermediate goods are excluded from CPI as CPI measures retail consumer prices, not production or investment goods.
  3. Final Answer:

    Capital goods and intermediate goods → Option B
  4. Quick Check:

    CPI excludes capital and intermediate goods ✅
Quick Trick: CPI focuses on consumer goods, not capital goods.
Common Mistakes:
  • Assuming all goods including capital goods are in CPI basket.
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