13 November Static Quiz 2021
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13 November Static Quiz 2021 for UPSC Prelims
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Question 1 of 5
1. Question
Consider the following with reference to the Wholesale Price Index (WPI).
(1) The present WPI base is 2004-05.
(2) It excludes consumer durables and precious metals.
(3) Highest weightage has been accorded to manufactured products in the index.Select the correct answer using the codes below.
Correct
Solution: b)
Justification: There are three major groups in WPI – Primary Articles, Fuel & Power and Manufacture Products. Highest weightage has been accorded to the manufactured products. Consumer durables are a part of the manufactured products category. The WPI series base year, article composition and weightage has been revised to 2011-12 recently. The Office of the Economic Adviser takes the work relating to revision of the existing series of WPI.Incorrect
Solution: b)
Justification: There are three major groups in WPI – Primary Articles, Fuel & Power and Manufacture Products. Highest weightage has been accorded to the manufactured products. Consumer durables are a part of the manufactured products category. The WPI series base year, article composition and weightage has been revised to 2011-12 recently. The Office of the Economic Adviser takes the work relating to revision of the existing series of WPI. -
Question 2 of 5
2. Question
Consumer Price Index (CPI) Inflation in India is measured on a
Correct
Solution: c)
Justification: Reference dates for calculating inflation are from the preceding and succeeding month of the same
year. You can see the data here Until recently, India had several sectoral consumer price indices (CPI) and a national level wholesale price index (WPI). A national-level consumer price index (CPI-combined) was released in 2011 and the inflation target for monetary policy is prescribed in terms of all-India CPI-combined index.Incorrect
Solution: c)
Justification: Reference dates for calculating inflation are from the preceding and succeeding month of the same
year. You can see the data here Until recently, India had several sectoral consumer price indices (CPI) and a national level wholesale price index (WPI). A national-level consumer price index (CPI-combined) was released in 2011 and the inflation target for monetary policy is prescribed in terms of all-India CPI-combined index. -
Question 3 of 5
3. Question
An inflationary gap signals that the economy is in which part of the trade cycle?
Correct
Solution: a)
Justification: It is a situation where resources are being used over their capacity, factories are operating with increasing average costs; wage rates increase because labour is used beyond normal hours at overtime pay rates. The inflationary gap is so named because the relative increase in real GDP causes an economy to increase its consumption, which causes prices to rise in the long run. The main cause of the gap is considered to be expansionary monetary policies carried out by the government.Incorrect
Solution: a)
Justification: It is a situation where resources are being used over their capacity, factories are operating with increasing average costs; wage rates increase because labour is used beyond normal hours at overtime pay rates. The inflationary gap is so named because the relative increase in real GDP causes an economy to increase its consumption, which causes prices to rise in the long run. The main cause of the gap is considered to be expansionary monetary policies carried out by the government. -
Question 4 of 5
4. Question
Which of the following is levied on imported goods to offset subsidies made to producers
in the exporting country?Correct
Answer: D
Incorrect
Answer: D
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Question 5 of 5
5. Question
The Wholesale Price Index (WPI) is released by
Correct
Solution: d)
Justification: WPI is an important statistical indicator, as various policy decisions of the Government, like inflation management, monitoring of prices of essential commodities etc., are based on it. It is one of the key variables for monetary policy changes by the Reserve Bank of India. In addition to its role as a policy variable, WPI is also used by various departments for arriving at the escalation costs of various contracts.Incorrect
Solution: d)
Justification: WPI is an important statistical indicator, as various policy decisions of the Government, like inflation management, monitoring of prices of essential commodities etc., are based on it. It is one of the key variables for monetary policy changes by the Reserve Bank of India. In addition to its role as a policy variable, WPI is also used by various departments for arriving at the escalation costs of various contracts.
