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Index Numbers

Question

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Write down the uses of the wholesale price index numbers.

Solution

Following are the uses of the wholesale price index numbers:

1. The wholesale price index (WPI) is used to eliminate the effect of changes in prices on aggregate such as national income, capital formation etc.

2. With the help of WPI, we can measure the rate of inflation. The following formula is used for calculating inflation rate.

Inflation rate
=

Some More Questions From Index Numbers Chapter

consumer price index measures changes in:

The wholesale price index.

D.A. paid to the workers is based on:

Why do we need an index number?

Why is it essential to have different CPIs for different categories of consumers?

What does a consumer price index for industrial workers measure?

What is the difference between a price index and a quantity index?

Is the change in any price reflected in price index number?

Can the CPI for urban non-manual employees represent the changes in the cost of living of the President of India?

Try to list the important items of consumption in your family.

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