ECONOMICS (CBSE/UGC NET)

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ECONOMICS

INFLATION

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The rate of inflation is most commonly measured by use of
A
a price deflator
B
the GDP deflator
C
the consumer price index
D
all of the above
Explanation: 

Detailed explanation-1: -The CPI is the most widely used measure of inflation and is sometimes viewed as an indicator of the effectiveness of government economic policy.

Detailed explanation-2: -The most well-known indicator of inflation is the Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households.

Detailed explanation-3: -Use the inflation rate formula Subtract the past date CPI from the current date CPI and divide your answer by the past date CPI. Multiply the results by 100. Your answer is the inflation rate as a percentage.

Detailed explanation-4: -The consumer price index, the most widely followed inflation gauge, increased 7.0% from December 2020 to December 2021 – its highest rate in nearly 40 years. The CPI – or, to give it its full name, the Consumer Price Index for All Urban Consumers (CPI-U) – isn’t the government’s only measure of inflation.

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