(IGP) IAS Pre: GS - Indian Economy - Economy Concepts: Inflation Concepts, Facts & Policy (MCQ -3)

1. Match the following:
(i) Deflation             (a) Reduction of Rate of Inlfation
(ii) Stagflation          (b) When there is general fall in the level of prices.
(iii) Disinflation         (c) combination of inflation and rising unemployment due to recession.

(a) (b) (c)
(i) 1 2 3
(ii) 3 1 2
(iii) 2 3 1

2. Match the following:
(i) Creeping Inflation         (a) out of control
(ii) Trotting Inflaction         (b) Manageable
(iii) Hyper inflation             (c) Might accelerate into Galloping Inflation

(a) (b) (c)
(i) 3 1 2
(ii) 1 2 3
(iii) 3 2 1

3. Consider the following statements?
(1) Creeping inflation of 3 to 5 percent eroces the purchasing power of Money when continued over many years.
(2) A low creeping inflation could be good for economy.
(3) The creeping Inflation can lead Monetary collapse.

1. Match the following

1. GDP Deflator         (a) measures the change in the prices received by a producer.
2. PPI-Producer         (b) measures the change Price Index in price of a selection  of goods at wholesale prior to retail sales excluding sales tax.
3.WPI                        (c) combination of inflation and rising unemployment due to recession.

(a) (b) (c)
(i) 1 2 3
(ii) 3 1 2
(iii) 2 3 1

4. Match the following:
1. Demand Pull         (a) also called supply shock inflation Inflation.
2. Structural              (b) also referred as too Inflation much chasing too few years.
3. Cost ______         (c) caused by deficiencies Inflation in certain in the economy.

(a) (b) (c)
(i) 3 1 2
(ii) 1 2 3
(iii) 2 3 1

5. Consider the following statements?
(1) Mild Inflation is seen as “greasing the wheels of commerce”.
(2) The High Inflation will lead to increase in the purchasing power of then Income.
(3) Demand pull Inflation is caused by increase in the demand due to increased private & Government spending etc.

(a) all the above are correct
(b) only 1 and 3 are correct
(c) only 2 is correct.

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