ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A an increase in government expenditure on training
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B an increase in indirect taxes on demerit goods
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C an increase in import tariffs
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D an increase in interest rates
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Detailed explanation-1: -The Monetary Policy Framework On March 31, 2021, the Central Government retained the inflation target and the tolerance band for the next 5-year period – April 1, 2021 to March 31, 2026.
Detailed explanation-2: -Creeping inflation is a type of inflation in which the price level persistently rises over a period of time at a mild rate. During creeping inflation, the annual price rise varies between 2% to 3%. Creeping inflation is good for the economy as it creates demand.
Detailed explanation-3: -The Federal Open Market Committee (FOMC) judges that inflation of 2 percent over the longer run, as measured by the annual change in the price index for personal consumption expenditures, is most consistent with the Federal Reserve’s mandate for maximum employment and price stability.
Detailed explanation-4: -Creeping inflation also known as mild inflation is as the name suggests a very slow rise in prices of goods and services. If the prices increase by 3% or less annually, then such inflation is creeping inflation.