Fatineel
The consumer price index (CPI) in Bangladesh is expected to grow up next month because of an increase in the prices of selected food items.
Which of the following cannot be inferred from the argument?
A. The food prices have already risen sharply.
B. People started rationing their food consumption.
C. Food items claim a majority share of items in CPI.
D. Changes in food prices are quickly reflected in CPI.
E. There had been no significant decrease in prices of other items that make CPI.
Why the OA is C not B ?
Hi
The question requires you to be familiar with a little bit of economics - as price rises demand falls. Here rationing of the foods means that people are cutting down on their consumption of food i.e. demand is falling.
The OA is not B because the stem clearly states that food prices are on the rise. As the price of food is increasing, we can definitely infer that people will reduce their consumption of food and hence ration their consumption. They not eat lavishly. They will only eat what is needed. They will switch to basic food items and not eat luxury food items.
The OA is C. Try to think of this question has a Data Sufficiency problem from the Quant section.
The CPI is nothing but an average of prices of all consumer goods. Suppose a certain good is purchased by only 10% of the population. An increase in the price of this good will also cause the CPI to rise, despite it being a minority purchase.
The information given to us by the question is not sufficient to say that the weight of food items in the CPI (which is nothing but an average) is a majority (i.e. more than 50%). There could be 5 food items and 100 non-food items in the CPI. Or there could be 100 food items and 5 non-food items.
Hope it helps.