The index of prices of a given basket of commodities which are bought by the representative consumer is known as :
The index of prices of a given basket of commodities which are bought by the representative consumer is known as :
Solution
Option 1 -> Measures the price changes of goods and services purchased by consumers.
Option 2 -> Tracks prices at the wholesale/producer level, not consumer level.
Option 3 -> Measures prices of capital goods like machinery, not consumer goods.
Option 4 -> Refers to the general rise in prices, not a specific index.
Hence, Consumer Price Index -> The Consumer Price Index (CPI) specifically tracks the weighted average of prices for a basket of goods and services that a typical household purchases, such as food, clothing, transportation, and medical care. It is the standard measure used to assess the cost of living and purchasing power of consumers in an economy. -> correct
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