WHOLESALE PRICE INDEX Meaning and
Definition
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The wholesale price index (WPI) is an economic indicator that measures the average changes in the prices at the wholesale level over a specific period of time. It is designed to track the price movements of a representative basket of wholesale goods and services, providing insights into inflation and price trends. The WPI is often considered a key indicator of the overall price levels in an economy and is commonly used by policymakers, analysts, and businesses to assess inflationary pressures.
The WPI is calculated based on a fixed set of commodities that represent various sectors of the economy such as agriculture, manufacturing, and mining. These commodities are selected to reflect the importance and significance of their respective industries in the overall economy. The prices of these commodities are monitored and recorded periodically by government agencies or statistical organizations.
The WPI takes into account both the domestic and imported prices of these goods, providing a comprehensive picture of price changes in the wholesale sector. It is typically expressed as an index number relative to a base year, which allows for easy comparison and analysis of price movements over time. A higher WPI suggests inflationary pressures, while a lower index indicates deflation or lower prices.
The WPI is often used as a reference for businesses to make pricing decisions, negotiate contracts, and evaluate the impact of price changes on their operations. Additionally, policymakers refer to the WPI to gauge overall inflationary trends and formulate appropriate monetary and fiscal policies to maintain price stability and promote economic growth.
Common Misspellings for WHOLESALE PRICE INDEX
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