Questions on Consumer Price Index (CPI) – New Series (2024)

 

MCQ 1

With reference to the revised Consumer Price Index (CPI) series in India, consider the following statements:

1. The new CPI series has a base year of 2024.

2. The weights are derived from the Household Consumption Expenditure Survey (HCES) 2023–24.

3. The weight of Food & Beverages has increased compared to the 2012 series.

Which of the statements given above is/are correct?

A. 1 only

B. 1 and 2 only

C. 2 and 3 only

D. 1, 2 and 3

✅ Answer: B. 1 and 2 only

Explanation:

• Base year updated → ✔

• Based on HCES 2023–24 → ✔

• Food weight reduced, not increased → ✖

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📝 MCQ 2

Which of the following is/are expected outcomes of reducing the weight of Food & Beverages in CPI?

1. Reduced volatility in headline inflation

2. Better reflection of current consumption patterns

3. Elimination of food inflation from CPI

A. 1 and 2 only

B. 2 only

C. 1 and 3 only

D. 1, 2 and 3

✅ Answer: A. 1 and 2 only

Explanation:

• Food prices volatile → lowering weight reduces volatility ✔

• Reflects changing expenditure patterns ✔

• Food not removed entirely ✖

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📝 MCQ 3

Consider the following features of the new CPI series:

1. Inclusion of online marketplaces

2. Increase in the number of items in the basket

3. Exclusive focus on rural consumption

Which of the above is/are correct?

A. 1 only

B. 1 and 2 only

C. 2 and 3 only

D. 1, 2 and 3

✅ Answer: B. 1 and 2 only

Explanation:

• Online platforms included ✔

• Basket expanded ✔

• CPI covers both rural & urban, not exclusive ✖

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📝 MCQ 4

In India, which institution is primarily responsible for compiling and releasing the Consumer Price Index (CPI)?

A. Reserve Bank of India (RBI)

B. NITI Aayog

C. Ministry of Statistics and Programme Implementation (MoSPI)

D. Ministry of Finance

✅ Answer: C. Ministry of Statistics and Programme Implementation (MoSPI)

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📝 MCQ 5

Which of the following are linked to CPI-based inflation?

1. Dearness Allowance (DA)

2. Dearness Relief (DR)

3. Repo Rate

A. 1 only

B. 1 and 2 only

C. 2 and 3 only

D. 1, 2 and 3

✅ Answer: B. 1 and 2 only

Explanation:

• DA & DR indexed to inflation ✔

• Repo Rate decided by RBI using CPI but not directly indexed ✖

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📝 MCQ 6

Why is frequent revision of CPI base year considered important?

A. To reduce inflation permanently

B. To reflect structural changes in the economy

C. To increase government tax revenue

D. To stabilize exchange rate

✅ Answer: B. To reflect structural changes in the economy

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📝 MCQ 7

Which of the following best describes the role of CPI in India?

A. Measures wholesale price movements

B. Serves as inflation target for monetary policy

C. Tracks GDP growth

D. Measures unemployment

✅ Answer: B. Serves as inflation target for monetary policy