| Consider the following statements .about the measurement of the Inflation |
| 1. Prices of the items of particular sets are compared to prices of items of five year ago. |
| 2. Inflation is measured based on the Consumer Price Index (CPI) which measures the change in prices of a selection of goods at retail rates. |
| Which of the statements given above is/are correct? |
A) Only 1
B) Only 2
C) Both 1 and 2
D) neither 1 nor 2
Correct Answer: D
Solution :
India used WPI (Wholesale Price Index as the measure for inflation but new CPI (combined) is declared as the new standard for measuring inflation (April 2014) Hence Statement 2 can be considered as correct and answer to this question would be [b]
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