Economic Awareness - Sectors of Indian Economy
Which of the following statements correctly distinguishes between inflation and disinflation?
Which of the following statements correctly distinguishes between inflation and disinflation?
hard Q9 of 15
Step-by-Step Solution
Step 1: Define inflation and disinflation
Inflation is a sustained rise in general price levels. Disinflation is a reduction in the rate of inflation, not a price fall.Step 2: Analyze options
Inflation is a sustained rise in prices; disinflation is a decrease in inflation rate correctly distinguishes inflation and disinflation. Inflation is a rise in prices; disinflation is a fall in prices incorrectly defines disinflation as price fall (which is deflation). Inflation and disinflation both mean the same is false as they differ. Disinflation causes prices to rise faster than inflation is incorrect as disinflation means slower price rise, not faster.Step 3: Explain why other options are wrong
Price fall is deflation, not disinflation. Inflation and disinflation are distinct concepts. Disinflation slows inflation, does not accelerate it.Final Answer:
Inflation is a sustained rise in prices; disinflation is a decrease in inflation rate → Option CQuick Check:
Inflation vs disinflation = rise vs slower rise in prices ✅
Quick Trick: Disinflation means inflation rate slows, not prices fall.
Common Mistakes:
- Confusing disinflation with deflation or equating it with inflation.
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