ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It is a decrease in the rate of inflation-a slowdown in the rate of increase of the general price level of goods and services
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It is a situation of persistent rise in inflation along with dip in growth and increase in unemployment
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It is the situation where prices fall continuously or have tendency to fall
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It represents price rise in all goods and services but does not include articles from food and energy sector.
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Detailed explanation-1: -Deflation usually happens when supply is high (when excess production occurs), when demand is low (when consumption decreases), or when the money supply decreases (sometimes in response to a contraction created from careless investment or a credit crunch) or because of a net capital outflow from the economy.
Detailed explanation-2: -Which out of the following is phenomenon that leads to Disinflation? It represents price rise in all goods and services but does not include articles from food and energy sector.
Detailed explanation-3: -(I) Deflation is a decrease in the general price level of goods and services.
Detailed explanation-4: -Causes of Deflation A decline in aggregate demand typically results in subsequent lower prices. Causes of this shift include reduced government spending, stock market failure, consumer desire to increase savings, and tightening monetary policies (higher interest rates).