Question

Define the following terms:

1. inflation

2. price index

3 . CPIs

4. WPIs 

Answer 1

1. Continuous rise in prices of goods is known as inflation.
2. Change in price is measured with the help of a statistical device known as a price index.
3. CPIs are used to calculated DA (Dearness Allowance) to be paid for government employees, to revise legal wages, etc.
4. WPIs are helpful in calculating the rates of inflation.