MCQ
Inflation Statistics MCQ - Practice Questions with Answers
Solve 86 Inflation Statistics questions for RAS/RPSC preparation.
Practice questions
Q1Consider the following statements about the Consumer Food Price Index (CFPI): 1. Consumer Food Price Indices are compiled for Rural, Urban and Combined sectors. 2. CFPI is compiled as a weighted average of the indices of specified food sub-groups. 3. All-India CPI official releases include inflation rates for CFPI. Which of the statements given above are correct?
All three statements are correct. CFPI is compiled for Rural, Urban and Combined sectors as a weighted average of specified food sub-groups, and All-India CPI official releases carry CFPI inflation rates.
Q2With reference to CPI price-data collection, consider the following statements: 1. CPI price data are collected from selected towns. 2. CPI price data are collected from selected villages. 3. CPI price data are collected by DPIIT's Office of the Economic Adviser. Which of the statements given above are correct?
Statements 1 and 2 are correct: CPI price data are collected from selected towns and selected villages. Statement 3 is false because the cited CPI source names the Field Operations Division of NSO, MoSPI, not OEA/DPIIT.
Q3With reference to monetary policy and inflation statistics in India, consider the following statements: 1. The amended RBI Act defined the primary objective of monetary policy as maintaining price stability while keeping in mind the objective of growth. 2. India's statutory inflation target is expressed in terms of WPI. 3. The Central Government determines the inflation target in consultation with the Reserve Bank. 4. In the first review conducted in March 2021, the target was replaced by a new WPI-based range. Which of the statements given above are correct?
Statements 1 and 3 are correct. RBI material states the price-stability-with-growth objective and says the Central Government determines the CPI inflation target in consultation with the Bank. Statement 2 is incorrect because the target is in terms of CPI, not WPI. Statement 4 is incorrect because the March 2021 review retained the target for the subsequent five years.
Q4With reference to CPI and CFPI in an official MoSPI release, consider the following statements: 1. CPI is released for rural, urban and combined sectors. 2. CFPI is released only for urban India. 3. The CPI release cited is on base 2012=100. Which of the statements given above are correct?
Statements 1 and 3 are correct: the official release refers to CPI for rural, urban and combined sectors on base 2012=100. Statement 2 is false because CFPI is released for all-India rural, urban and combined sectors.
Q5With reference to India's statutory inflation-targeting framework, consider the following statements: 1. Under Section 45ZA of the RBI Act, the Central Government, in consultation with the RBI, determines the inflation target in terms of CPI. 2. The inflation target is to be determined once every five years. 3. Section 45ZB provides for a six-member Monetary Policy Committee to determine the policy rate required to achieve the inflation target. 4. The target is specified in terms of WPI inflation because WPI excludes services. Which of the statements given above are correct?
Statements 1, 2 and 3 are correct. RBI's discussion paper states that Section 45ZA uses CPI and requires review once in five years, while Section 45ZB creates a six-member MPC for the policy rate. Statement 4 is incorrect because the target is in terms of CPI, not WPI.
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6With reference to the CPI-IW 2016=100 series, consider the following statements: 1. The CPI-IW 2016=100 series replaced the CPI-IW 2001=100 series. 2. The 2016 series covered 88 centres against 78 centres in the previous series. 3. The 2016 series reduced selected markets from 317 to 289. Which of the statements given above are correct?
7With reference to the review of India's inflation target in 2021, consider the following statements: 1. The first review was conducted in March 2021. 2. The inflation target was retained for the subsequent five years till March 2026. 3. The retained framework was 4 per cent with a tolerance band of plus/minus 2 per cent. 4. The review shifted the target from CPI inflation to WPI inflation. Which of the statements given above are correct?
8With reference to the revised Consumer Price Index (CPI) series in India, consider the following statements: 1. The base year was revised from 2010 to 2012. 2. The revised series was released with effect from January 2015. 3. The revised weighing diagrams were prepared using the Modified Mixed Reference Period data of the 2011-12 Consumer Expenditure Survey. 4. The old CPI series' weighing diagrams were based on the Uniform Reference Period data of the 2011-12 Consumer Expenditure Survey. Which of the statements given above are correct?
9With reference to the revised CPI weighting diagram, consider the following statements: 1. Pan, tobacco and intoxicants has a combined weight of 2.38. 2. Clothing and Footwear has a combined weight of 6.53. 3. Miscellaneous has an urban weight of 28.00 in the revised series. 4. Housing has a rural weight of 21.67 in the revised series. Which of the statements given above are correct?
10With reference to the Monetary Policy Report under the amended RBI Act, consider the following statements: 1. RBI is required to publish the Monetary Policy Report once every six months. 2. The report explains the sources of inflation. 3. The report forecasts inflation for the next 24-36 months. Which of the statements given above are correct?
11Consider the following statements regarding Agriculture Ministry price work linked to WPI: 1. The Directorate of Economics and Statistics provides wholesale price data to DPIIT for WPI compilation. 2. Current WPI data cover 109 commodities, 237 markets and 905 quotations. 3. WPI data are provided to RBI, not DPIIT. Which of the statements given above are correct?
12Consider the following statements about WPI data and history: 1. WPI (2011-12) data were provided from April 2012 to March 2017 for research and analysis only. 2. The earliest register discovered in 2014 contained wholesale prices for Bombay. 3. The first Economic Adviser in pre-Independence India started a quick WPI series using the week ended August 19, 1939 as base. Which of the statements given above are correct?
13Consider the following statements regarding Wholesale Price Index data collection: 1. WPI is used as an important measure of inflation in India. 2. The base year for WPI is 2011-12=100. 3. WPI price collection covers 6,019 quotations from 6,765 manufacturing units. Which of the statements given above are correct?
14With reference to item coverage and new features in the WPI 2011-12 series, consider the following statements: 1. The new WPI basket has 697 items. 2. The basket includes 117 Primary Articles, 16 Fuel & Power items and 564 Manufactured Products. 3. A WPI Food Index is compiled by combining Food Articles under Primary Articles and Food Products under Manufactured Products. 4. The WPI Food Index replaces the Consumer Food Price Index released by the Central Statistics Office. Which of the statements given above are correct?
15With reference to the improvements in the CPI-IW 2016 series over the 2001 series, consider the following statements: 1. A total of 88 centres were covered in the 2016 series, compared with 78 centres in the 2001 series. 2. The sample size for the Working Class Family Income and Expenditure Survey increased to 48,384 families from 41,040. 3. The number of selected markets for retail price collection increased to 317 from 289. 4. Arithmetic mean based methodology was used in the 2016 series in place of geometric mean based methodology in the 2001 series. Which of the statements given above are correct?