Question

To measure consumer price index (CPI) which of the following years are taken into consideration? (A) Current Year.
(B) Preceding Year.
(C) Base Year.
(D) Succeeding Year.

• A. (A), (B) and (D) only
• B. (A) and (C) only
• C. (A), (B) and (C) only
• D. (B), (C) and (D) only

Hint:

Always remember: CPI = Current Year Prices / Base Year Prices × 100. Only these two years matter.

Answer 1

The Correct Option is B

Step 1: Recall CPI formula.
\[ CPI = \frac{\text{Cost of basket in Current Year}}{\text{Cost of basket in Base Year}} \times 100 \] Step 2: Explanation.
- CPI requires Current Year (to observe present prices).
- CPI requires Base Year (as the reference).
- Preceding year and succeeding year are not part of CPI calculation.
Step 3: Verify options.
Only (A) and (C) are correct.
Final Answer: \[ \boxed{\text{CPI is measured using Current Year and Base Year.}} \]