With respect to inflation in the Indian context, consider the following statements: Retail inflation, measured by the Consumer Price Index (CPI), is the primary metric used by the Reserve Bank of Ind…

Question

With respect to inflation in the Indian context, consider the following statements: Retail inflation, measured by the Consumer Price Index (CPI), is the primary metric used by the Reserve Bank of India (RBI) for monetary policy formulation. Core inflation includes volatile components like food and fuel prices, providing a more stable measure of underlying inflationary pressures. Supply-side factors, such as monsoons affecting agricultural output and global crude oil prices, play a significant role in India’s inflation dynamics. Headline inflation refers to the total inflation in an economy, including volatile components such as food and energy prices. Which of the above statements are correct?

PYQPulse · Accepted Answer

1, 3 and 4 only

PYQPulse · Answer

Explanation: Statement 1 is correct. The Reserve Bank of India (RBI) adopted the Consumer Price Index (CPI) as its primary measure for inflation targeting and monetary policy formulation in 2014, based on the recommendations of the Urjit R.

Answer: B. 1, 3 and 4 only

Explanation

Answer: B. 1, 3 and 4 only

Explanation