ECONOMICS (CBSE/UGC NET)

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ECONOMICS

INFLATION

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Read the statement and decide whether it is TRUE or FALSE. “Mild inflation refers to the exceptionally high inflation rate and rises to 10% or more, it wreaks absolute havoc on the economy.”
A
TRUE
B
FALSE
C
Either A or B
D
None of the above
Explanation: 

Detailed explanation-1: -The true statement is option d) It refers to an increase in the average level of prices. The inflation over a given period signifies the general increase in the average price level of goods and services.

Detailed explanation-2: -Creeping Inflation: This is also known as mild inflation or moderate inflation. This type of inflation occurs when the price level persistently rises over a period of time at a mild rate.

Detailed explanation-3: -Inflation is the general rise in the prices of goods and services in an economy, over a period of time. It reduces the purchasing power of consumers, because each unit of currency can purchase fewer products with an increase in the general price levels.

Detailed explanation-4: -Mild inflation leads to an increase in wages and creates new jobs. On the other hand, zero inflation reflects uncertainty and reluctance to invest. As a result, it hurts the economy.

There is 1 question to complete.
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