Q. Consider the following statements:
1.A persistent increase in the general level of prices is called as inflation.
2.When the general level of prices is falling over a period of time this is known as disinflation.
Which of the statements given above is/are correct?
Answer: C
Notes:
Explanation: A rise in the general level of prices; a sustained rise in the general level of prices; persistent increases in the general level of prices; an increase in the general level of prices in an economy that is sustained over time; rising prices across the board —is inflation.
When the general level of prices is falling over a period of time this is deflation, the opposite situation of inflation. It is also known as disinflation.
Source: Ramesh Singh
