ECONOMICS (CBSE/UGC NET)

ECONOMICS

INFLATION

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

In state Z, prices for goods and services have been rising by 60-70% per month for six months. What kind of inflation is observed in state Z?

A	Cost inflation
B	Hyperinflation
C	Demand inflation
D	Moderate inflation

Explanation:

Detailed explanation-1: -Based on speed, there are 4 different types of inflation – hyperinflation, galloping, walking, and creeping.

Detailed explanation-2: -The two primary causes of hyperinflation are (1) an increase in money supply not supported by economic growth, which increases inflation, and (2) a demand-pull inflation, in which demand outstrips supply. These two causes are clearly linked since both overload the demand side of the supply/demand equation.

Detailed explanation-3: -Economists distinguish between two types of inflation: Demand-Pull Inflation and Cost-Push Inflation. Both types of inflation cause an increase in the overall price level within an economy.

Detailed explanation-4: -Demand Pull. Cost-Push. Open. Repressed. Hyperinflation. Creeping. Moderate. True. More items

There is 1 question to complete.