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Changes and movement in prices influence buying and selling decisions, and thus the frugal scenario. Hence the government, businesses, producers and consumers keep a constant check on prices. However, assumption the large number of items that ar sold and purchased every day, it is ambitious to keep track of all of them. That is where price indices come in. They control a sense of the overall direction and trend in prices. These indices ar available for contrastive sectors and for different groups of people. There are indices establish on prices in different markets or at different points of sales. Of the many indices, two are of critical importance. The first is the sweeping Price Index (WPI), which is ground on the price dominant in the wholesale markets or the price at which raft transactions are made. The other is the Consumer Price Index (CPI), which is based on the final prices of goods at the retail level. Both these indices are the weighted averages of prices of a specified set of goods and services. The WPI is compiled and print by Office of the Economic Advisor on a weekly priming coat while the CPI is compiled and published by the Labour pectus on a monthly land in India. The CPI is published for rural, agricultural and industrial workers.

The use of price indices These indices are utilise for various purposes, including for forecasting in businesses, employ by organizations and institutions for their analysis, and by the RBI and the government of India to frame monetary and fiscal policy, etc. The WPI is used to measure inflation in India because of the non-availability of appropriate CPI. It is used to deflate subject field income to calculate real output in the economy. Also supercede rates are often adjusted on the basis of WPI. For example, (hypothetical since India has flexible exchange rate) suppose the WPI index in India rises by current points (inflation). In order to maintain the purchasing power of the rupee vis-a-vis other currencies, the... If you want to get a practiced essay, order it on our website: Orderessay

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