ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -TL; DR. WPI Inflation is a measure of the rate of change in the prices of a basket of goods and services in a particular market. It is an important economic indicator used to assess the health of an economy, and is calculated based on the prices of 697 commodities.

Detailed explanation-2: -Comparative price level indices are the ratios of purchasing power parities to market exchange rates. At the level of GDP, comparative price levels provide a measure of the differences in the general price levels of countries. This indicator is measured as an index.

Detailed explanation-3: -Headline Inflation is the measure of total inflation within an economy. It includes price rise in food, fuel and all other commodities. The inflation rate expressed in Wholesale Price Index (WPI) usually denotes the headline inflation.

Detailed explanation-4: -WPI also helps in measuring macroeconomic and microeconomic conditions of the economy. WPI provides estimates of inflation at the wholesale transaction level for the economy overall. It also helps in timely intervention by the government to monitor inflation before the price hike spills over to retail prices.