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

medium Q4 of 15
Economic Awareness - Sectors of Indian Economy
Which of the following statements about the Consumer Price Index (CPI) is FALSE?
ACPI includes prices of capital goods and intermediate goods
BCPI is used as a key indicator of inflation
CCPI measures changes in retail prices of consumer goods and services
DCPI has different variants for industrial, agricultural, and rural labourers
Step-by-Step Solution
  1. Step 1: Understand CPI scope

    CPI measures retail price changes of consumer goods and services and is a key inflation indicator.
  2. Step 2: Analyze the false statement

    CPI excludes capital goods and intermediate goods; these are not part of consumer retail prices. CPI variants exist for different labour groups.
  3. Final Answer:

    CPI includes prices of capital goods and intermediate goods → Option A
  4. Quick Check:

    CPI excludes capital goods (this statement is false) ✅
Quick Trick: Remember CPI excludes capital and intermediate goods.
Common Mistakes:
  • Assuming CPI covers all goods including capital goods.
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