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Which of the following is correct about WPI (Wholesale Price Index) related to inflation? (A) It measures the wholesale prices on a weekly basis. (B) It focuses on both goods as well as services. (C) t measures the wholesale prices on a monthly basis. (D) It focuses only on goods, not on services.

Which of the following is correct about WPI (Wholesale Price Index) related to inflation? (A) It measures the wholesale prices on a weekly basis. (B) It focuses on both goods as well as services. (C) t measures the wholesale prices on a monthly basis. (D) It focuses only on goods, not on services. Correct Answer A, C and D only

The correct answer is A and D only

Key Points

  • WPI (Wholesale Price Index): It is an index that measures inflation.
    • While retail inflation looks at the price at which the consumer buys the goods.
    • Inflation measure in the first stage in WPI.
    • Item covered in WPI is fuel, power, and manufacturing products.
    • WPI is measured on a weekly basis for primary articles like fuel, and power for the rest of manufacturing products is published monthly basis.
    • WPI focuses on the prices of goods only.
  • Difference between WPI and CPI: WPI is only for goods, you cannot buy services on a wholesale basis.
    • So WPI does not include services, whereas CPI does include both goods and services.

Additional Information

  • About CPI:

    • The consumer price index (CPI) is a measure of the average change over time in the prices paid by consumers in urban households for a basket of goods and services.

      • ​These goods and services are broken into eight major groups mainly: food and beverages, housing, apparel, transportation, medical care, recreation, education, and communication.

    • The CPI is calculated by taking price changes for each item consumers spend on a basket of consumer goods and services and then averaging them.

    • Changes in the CPI reflect changes in the cost of living in most of the developed countries.

      • As such, the CPI is an economic indicator that is most frequently used for identifying periods of inflation.

  • Inflation: Inflation in general terms refers to the persistent rise in the general price level in the country over a period of time.
    • During inflation, there is an increase in the money supply.
  • Causes of Inflation: 
    1. ​​A mismatch between demand and supply.
    2. When demand exceeds supply.
    3. Due to changes in demand-side or supply-side or both.
  • Types of Inflation:
    • ​Creeping Inflation: Slows and on predictable lines.
    • Galloping Inflation: Very high.
    • Hyper Inflation: Large and accelerating.
    • Bottleneck Inflation: When supply falls drastically and demand remains the same.
  • Measures of Inflation:
    • ​Wholesale Price Index.
    • GDP deflator.
    • Consumer Price Index.

Related Questions

Consider the following statements with respect to Consumer Price Index and Wholesale Price Index in India: 1. The WPI is calculated for only goods and CPI is calculated for both goods and services.  2. The WPI is published by the Office of the Economic Advisor in the Ministry of Commerce and Industry while the CPI is published by the Central Statistical Office. 3. The WPI is published on a weekly basis for primary articles and fuel and power and is published monthly for the rest of the items, whereas the CPI is released on a monthly basis. 4. The WPI measures inflation in the initial stages of the supply chain whereas the CPI measure inflation in the later stages of the supply chain. Which among the above given statements are correct?
Consider the following statements: 1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI). 2. The WPI does not capture changes in the prices of services, which CPI does. 3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates. Which of the statements given above is/are correct?
Consider the following statements regarding the measurement of rate of inflation.
Statement I The rate of inflation is measured on the basis of price indices which are of two kinds-Wholesale Price Index (WPI) and Consumer Price Index (CPl).
Statement II A price index is a measure of the average level of prices.
Statement III Price index shows the exact price rise or fall of a single good.
Which of the following correctly explains the difference between WPI and CPI inflation? 1. CPI accounts for the services too unlike WPI. 2. CPI measures inflation down to the retail consumer level, unlike WPI. 3. Both indicators can be used for the measurement of inflation. Choose the correct answer using the codes below:
With reference to India, consider the following statements: 1. The Wholesale Price Index (WPI) in India is available on a monthly basis only. 2. As compared to Consumer Price Index for Industrial Workers (CPI(IW)), the WPI gives less weight to food articles. Which of the statements given above is/are correct?
The following sentences form a paragraph.They are numbered as P, Q, R and S. These four parts are not given in their proper order. Read the sentences and choose the alternative that arranges them in correct order. P. It is the ratio of the value of goods and services an economy produces in a particular year at current prices to that of prices that prevailed during the base year. Q. The GDP deflator, also called implicit price deflator, is a measure of inflation. R. Since the deflator covers the entire range of goods and services produced in the economy — as against the limited commodity baskets for the wholesale or consumer price indices — it is seen as a more comprehensive measure of inflation. S. This ratio helps show the extent to which the increase in gross domestic product has happened on account of higher prices rather than increase in output.
Mr. Justin wanted to test his students' understanding of the 'nature of weekly markets from a seller's point of view'. Which of the following questions are suited to test this? i. Can a weekly market address all the needs of a family? Why or why not? ii. Compare and contrast the characteristics of a weekly market and a permanent shop. iii. Are you likely to find a well-known brand as part of a weekly market? Why or why not? iv. Can any seller increase their price a lot compared to other sellers in a weekly market? Why or why not?
Consider the statements: RBI uses inflation targets to decide its various monetary policy rates.  RBI only considers only CPI for inflation targeting. RBI uses CPI along with WPI for inflation targeting. Inflation targeting guarantees economic stability in a country. Which of the following statements are true?
A statement is given below in the question followed by three courses of actions numbered I, II and III. On the basis of the information given, you have to assume everything in the statement to be true, and then decide which of the following suggested courses of actions logically follow(s) for pursuing. Statement: Hindustan Unilever and Nestlé plan to selectively increase prices of their products to take into account higher crude oil and petrol costs, the rupee’s depreciation against the dollar and more expensive commodities such as wheat. If crude remains where it is and if the rupee has depreciated, of course, there are headwinds as far as costs are concerned. I. Nestlé India’s logistics providers are looking to renegotiate rates after record-high petrol and diesel prices. Nestlé declined to comment on when and by how much prices would increase.  II. Nestlé commented that HUL had dropped prices in November after the Goods & Services Tax was introduced last year and an increase in prices now would likely not hurt consumers.  III. Petrol prices have crossed Rs 90 a litre in Mumbai on increasing global prices of crude oil, of which India is a net importer, further impacted by the falling rupee. Crude derivatives, which are key inputs for FMCG companies, and petroleum derivatives used in packaging material including bottles and tubes, have also become more expensive.
The given pie chart show the monthly household expenditure of Family A and Family B under various heads. The monthly expenditures incurred for Family A and Family B are ₹50,000 and ₹75,000, respectively. Study the charts carefully and answer the question that follows. Monthly Household Expenditure of ₹50,000 under various heads of Family A Monthly household expenditure of ₹75,000 under various heads for Family B If the monthly expenditures of both families are combined together then the expenditures on Entertainment of both families together will be what percentage of the total monthly expenditures of both families? Express your answer to the nearest integer.