Which one of the following indices is now used by the Reserve Bank of India to measure the rate of inflation in India?

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Q: 100 (CDS-I/2017)

Which one of the following indices is now used by the Reserve Bank of India to measure the rate of inflation in India?

question_subject: 

Economics

question_exam: 

CDS-I

stats: 

0,176,92,13,3,214,38

keywords: 

{'bse index': [0, 0, 0, 1], 'consumer price index': [0, 0, 1, 2], 'nasdaq index': [0, 0, 0, 1], 'indices': [0, 0, 0, 2], 'wholesale price index': [0, 0, 5, 1], 'inflation': [0, 1, 0, 3], 'reserve bank': [1, 0, 3, 4], 'rate': [2, 3, 13, 20], 'india': [8, 1, 7, 13]}

The correct answer for this question is option 3, which is the Consumer Price Index (CPI). The Reserve Bank of India (RBI) uses the CPI to measure the rate of inflation in India. Let`s analyze the other options to understand why they are not the correct choices.

Option 1, the NASDAQ Index, is not used by the RBI to measure inflation. The NASDAQ Index is a stock market index that tracks the performance of technology companies listed on the NASDAQ stock exchange in the United States. It is not related to measuring inflation in India.

Option 2, the BSE Index, also known as the S&P BSE Sensex, is another stock market index in India. However, it is not used by the RBI to measure inflation. The BSE Index tracks the performance of the top 30 stocks listed on the Bombay Stock Exchange (BSE), providing information about the overall market performance.

Option 4, the Wholesale Price Index (WPI), used to be the primary measure of inflation in India. However, the RBI shifted its focus to the CPI and now considers it as a better indicator of retail inflation that affects the common people. Therefore, the WPI is not the index currently used by the RBI to measure inflation.

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