Which of the following best describes the difference between Consumer Price Index (CPI) and Wholesale Price Index (WPI)?

medium Q7 of 15

Economic Awareness - Sectors of Indian Economy

ACPI measures prices at wholesale level; WPI measures retail prices

BBoth CPI and WPI measure retail prices but for different goods

CCPI measures retail prices paid by consumers; WPI measures prices at wholesale level

DCPI measures government expenditure; WPI measures private consumption

Step-by-Step Solution

Step 1: Understand CPI and WPI scope
CPI measures retail prices paid by consumers, reflecting consumer inflation. WPI measures prices at the wholesale level, reflecting producer prices.
Step 2: Analyze options
Only the statement that CPI measures retail prices and WPI measures wholesale prices is correct. Other options confuse these roles.
Final Answer:
CPI measures retail prices paid by consumers; WPI measures prices at wholesale level → Option C
Quick Check:
CPI = retail prices; WPI = wholesale prices ✅

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

Common Mistakes:

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