This is an original preparation plan, not a new examination announcement. Check dates, stages, eligibility and application instructions in the issuing authority’s current notice.
01 / UNDERSTANDING
Plan your preparation
Recalculate one basket after changing weights while keeping price movements fixed to isolate the role of composition. Change only the weights to reveal why composition affects the answer. For a later review, distinguish basket inflation from household experience. Keep a specific error note about comparing price changes while ignoring component weights. Use a changed example after a short gap so that remembering one answer does not disguise a remaining misunderstanding.
02 / UNDERSTANDING
The concept in context
A weighted price index combines component movements according to specified expenditure weights. Large price changes in a small component can matter less to the aggregate than modest changes in a heavily weighted component. For a simplified fixed-weight calculation, multiply each component’s percentage change by its weight and add the contributions.
03 / UNDERSTANDING
A worked learning case
A simplified basket assigns 60% weight to food and 40% to services. Food prices rise 5% and services prices rise 10%. Their weighted contributions are 3 and 4 percentage points, giving a 7% basket increase under the stated fixed-weight assumptions. A household spending differently would generally experience a different weighted change.
ORIGINAL EDUCATIONAL PRACTICE
Try it before you check.
Which component contributes more to the illustrative basket increase?
Show the answer and reasoning
Services, contributing 4 percentage points.
Food contributes 0.60 times 5%, equal to 3 percentage points. Services contribute 0.40 times 10%, equal to 4 percentage points. Their sum is 7%. Services contribute more despite their smaller weight because their price increase is twice as large. This is an explicitly simplified fixed-weight illustration.
Two traps to watch for.
- Comparing price changes while ignoring component weights.
- Treating an individual spending basket as the official aggregate basket.
YOUR TOPIC-SPECIFIC LEARNING MAP
Build your next study session
Check weights sum to the defined whole.
Calculate each component’s weighted contribution.
Distinguish basket inflation from household experience.
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.
- ncert.nic.in https://ncert.nic.in/textbook.php?leec1=ps-6
- www.rbi.org.in https://www.rbi.org.in/scripts/DataDefinition.aspx
For RBI preparation, check the current official notice before relying on changing dates, rules or examination requirements.
