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

Economic Affairs Development and Indicators

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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 encompasses various categories of food items, and it is calculated as an index representing changes in the prices of those specific food items over time. It's not generally expressed as a combined form for all categories; rather, it tracks changes in prices for specific food items.

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

This statement is generally true. Cereals and cereal products often have a significant weight in the calculation of the Consumer Food Price Index (CFPI) because they form a substantial part of the food basket consumed by households. The weights assigned to different food items may vary based on consumption patterns and their significance in the average consumer's diet.

Therefore, only statement 2 is correct