economics medium True/False

The Consumer Price Index (CPI) assigns the highest weightage to the 'Food and Beverages' category, whereas the Wholesale Price Index (WPI) assigns the highest weightage to 'Manufactured Products'.

  1. True
  2. False

Answer: True

This structural difference reflects the target audience of each index. The CPI measures retail inflation affecting the common man, for whom food constitutes the largest share of the household budget (over 45% weight). Conversely, the WPI tracks wholesale transaction prices, where manufactured goods dominate the basket (over 64% weight).

Topic Macroeconomics - Inflation
Exam Relevance UPSC Prelims, SSC CGL, Banking
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