Economic Awareness - Sectors of Indian Economy
Which of the following indices is most closely related to the calculation of core inflation in India?
Which of the following indices is most closely related to the calculation of core inflation in India?
medium Q6 of 15
Step-by-Step Solution
Step 1: Understand indices used for inflation
CPI measures retail consumer prices and is used for core inflation calculation.Step 2: Identify the relevant index
Core inflation is derived from CPI by excluding food and fuel components.Final Answer:
Consumer Price Index (CPI) → Option CQuick Check:
Core inflation derived from = Consumer Price Index ✅
Quick Trick: Core inflation uses CPI excluding volatile components.
Common Mistakes:
- Confusing WPI or GDP deflator as basis for core inflation.
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