ECONOMICS (CBSE/UGC NET)

ECONOMICS

INFLATION

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
National inflation rates vary widely but they have declined for most countries in recent years.Which combination might best explain this decline in inflation rates? OCT/NOV 2014 11
A
A increased consumer expenditure and tighter control on international trade
B
B increasing international competition and reduced world incomes
C
C low interest rates and expectations of future price increases
D
D protectionist trade measures and a rise in raw material prices
Explanation: 

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

Detailed explanation-2: -It’s important to note that each country calculates its inflation rate a bit differently and regional circumstances can also affect the rate. A 10% inflation rate in the U.S., for instance, isn’t necessarily the same as a 10% inflation rate in Turkey.

Detailed explanation-3: -Argentina and Turkey are currently experiencing the highest inflation rates in the G20. In January 2023, Turkey’s rate was 57.7%.

Detailed explanation-4: -Most economists now believe that low, stable, and-most important-predictable inflation is good for an economy. If inflation is low and predictable, it is easier to capture it in price-adjustment contracts and interest rates, reducing its distortionary impact.

There is 1 question to complete.