Deflation: Understanding Price Level Falls
The question asks for the term describing a persistent fall in the general price level of goods and services.
- Deflation specifically refers to a sustained decrease in the overall price level. This means that, on average, goods and services become cheaper over time.
- Disinflation is a slowdown in the rate of inflation. Prices are still rising, but at a slower pace. It is not a fall in prices.
- Stagflation is a combination of stagnant economic growth, high unemployment, and high inflation. It does not involve a general fall in prices.
- Depression is a severe and prolonged downturn in economic activity, often characterized by high unemployment and falling output, but it's a broader economic condition, not just a price level phenomenon.
Therefore, a persistent fall in the general price level is correctly identified as deflation.
Important Questions from Inflation
With respect to inflation in the Indian context, consider the following statements:
1. Retail inflation, measured by the Consumer Price Index (CPI), is the primary metric used by the Reserve Bank of India (RBI) for monetary policy formulation.
2. Core inflation includes volatile components like food and fuel prices, providing a more stable measure of underlying inflationary pressures.
3. Supply-side factors, such as monsoons affecting agricultural output and global crude oil prices, play a significant role in India's inflation dynamics.
4. Headline inflation refers to the total inflation in an economy, including volatile components such as food and energy prices.
Which of the above statements are correct?
- Core inflation includes which of the following?
1. Food prices
2. Energy prices
Select the answer using the codes given below : - The amount by which the equilibrium level of real GDP exceeds the full employment level of GDP is called
- Which of the following goods are included to estimate food inflation in India?
1. Wheat
2. Paddy
3. Tobacco
4. Sugar
Select the correct answer using the code given below : - Which one of the following is not the anti-inflationary measure in India?
