This is an independent topic guide, not the official syllabus. Compare it with the current paper outline and rules published by the examination authority.
01 / UNDERSTANDING
Learning objectives
Cover index levels, percentage changes, period comparisons and disinflation concepts. The objective is accurate interpretation without assuming that one published basket represents every household’s personal consumption pattern.
02 / UNDERSTANDING
The concept in context
A price index summarises changes in a defined basket using a stated methodology. Inflation over a chosen interval is the percentage change in that index from the comparison period. CPI concerns consumer prices, but its weights and coverage mean it need not match the exact spending experience of every individual household.
03 / UNDERSTANDING
A worked learning case
Original educational case. In an original index example, the value rises from 100 to 110, a 10% increase, then from 110 to 115.5, a 5% increase. Inflation slows from 10% to 5%, yet the price index continues upward. Saying prices fell in the second interval would confuse a lower growth rate with a lower level.
ORIGINAL EDUCATIONAL PRACTICE
Try it before you check.
Original practice: An index rises from 120 to 126. What is its percentage increase?
Show the answer and reasoning
5%.
The change is 126 − 120 = 6 index points. Divide by the comparison value of 120 and multiply by 100 to obtain 5%. Six index points and six percent are different measures. The result describes the specified interval only; no monthly or annual label should be added unless that interval is supplied.
Two traps to watch for.
- Calling a lower positive inflation rate a fall in prices.
- Treating an index-point change as the same percentage change.
YOUR TOPIC-SPECIFIC LEARNING MAP
Your revision map
Identify index, period and comparison base.
Calculate points and percent separately.
Explain level versus rate in one sentence.
Explain the idea, apply it to a new situation, then check what changed in your reasoning.
BANKERS TUTORIAL · SOURCE NOTES
Keep the source alongside your notes.
Official links provide subject context and authoritative reference material. This guide’s explanation, scenario and question are original Bankers Tutorial learning content.
- www.ibps.in https://www.ibps.in/
- cpi.mospi.gov.in https://cpi.mospi.gov.in/
- mospi.gov.in https://mospi.gov.in/faq
For IBPS & RRB preparation, check the current official notice before relying on changing dates, rules or examination requirements.
