ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Inflation decreases during recessions and increases during expansions (recoveries).

Detailed explanation-2: -An economic boom is an often-short-lived period of rapid growth of real GDP resulting in lower unemployment, accelerating inflation rate and rising asset prices.

Detailed explanation-3: -As an economy grows, businesses and consumers spend more money on goods and services. In the growth stage of an economic cycle, demand typically outstrips the supply of goods, and producers can raise their prices. As a result, the rate of inflation increases.

Detailed explanation-4: -An economic boom is the expansion and peak phases of the business cycle. It’s also known as an upswing, upturn, and a growth period.

Detailed explanation-5: -The inflation rate responds to each phase of the business cycle. That’s the natural rise and fall of economic growth that occurs over time. The cycle corresponds to the highs and lows of a nation’s gross domestic product (GDP), which measures all goods and services produced in the country.