Q. Consider the following statements:
1.Wholesale Price Index (WPI) is primarily used to measure retail inflation.
2.A neutral monetary policy stance neither stimulates nor restrains economic growth.
Which of the statement(s) given above is/are correct?
Answer: B
Notes:
Explanation –
Statement 1 is incorrect. The Wholesale Price Index (WPI) measures inflation at the wholesale level, tracking changes in the prices of goods sold in bulk before they reach the retail market. Retail inflation, on the other hand, is measured by the Consumer Price Index (CPI), which reflects price changes from the consumer’s perspective.
Statement 2 is correct. A neutral monetary policy stance implies that the central bank’s policy is balanced and does not aim to either stimulate or restrain economic growth. It is intended to maintain current economic conditions without exerting additional pressure in either direction.
Source: The Hindu
