By signing in you confirm you are 18 or older, or have your parent’s or guardian’s consent.

UPSC Prelims 2025 CSAT, question 71

Topic: Reading comprehension

Directions · Q71 to Q72

Directions for the following 2 (two) items :
Read the following two passages and answer the items that follow the passages. Your answers to these items should be based on the passages only.

Passage · Q71

A single number for inflation is an aggregate across different commodities and services — the price rise differs for different items of consumption. So, the single number is arrived at by assigning weights to different commodities and services. For WPI, the weights in production are used; for CPI, the consumption basket is used. But people are not homogeneous. The consumption basket is vastly different for the poor, the middle classes, and the rich. Hence, the CPI is different for each of these classes and a composite index requires averaging the baskets.

Q71

Which one of the following statements best reflects the most logical, rational and crucial message conveyed by the passage ?

  1. (a) We must use WPI exclusively in measuring price rise and CPI should be done away with.
  2. (b) The present calculation of inflation rate does not correctly measure price rise of individual item/commodity.Correct answer
  3. (c) Inflation data under-presents services in the consumption basket.
  4. (d) Knowledge of inflation rate is not really of any use to anybody in the country.

Solution.

Answer: (b) The present calculation of inflation rate does not correctly measure price rise of individual item/commodity.

  1. The passage explains that a single headline inflation figure is a weighted average across many commodities and across vastly different consumption baskets of the poor, middle classes, and rich.
  2. Therefore, the single aggregate inflation rate does not reflect the actual price rise of an individual item or the specific inflation experienced by every household group.