Consider the following statements about Consumer Food Price Index 1 It is expressed as a combined fo...........

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Consider the following statements about Consumer Food Price Index

1.It is expressed as a combined form for all the categories.

2.Cereals and their products have the highest weight in its calculation.

Which of the statements given above is/are correct?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Explanation:

2 only

It is expressed as a combined form for all the categories.

This statement is incorrect. The Consumer Food Price Index (CFPI) typically does not represent a combined form for all food categories. Instead, it tracks the prices of specific food items separately to reflect changes in the cost of those items over time.

Cereals and their products have the highest weight in its calculation.

This statement is generally true. Cereals and cereal products often carry a significant weight in the calculation of the Consumer Food Price Index (CFPI) because they are staple foods and constitute a large portion of household food expenditure. Therefore, fluctuations in cereal prices can heavily influence the overall CFPI.

Therefore, only statement 2 is correct