WBCS.LIVE practice question

Inflation is

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. one time price level rise.
  2. increasing profits in production.
  3. increase in deficit financing.
  4. continuous increase in price level.

Correct answer and explanation

Correct answer: continuous increase in price level.

Explanation: āœ… Correct Answer: D. continuous increase in price level. šŸ“š Explanation: 'Inflation' is defined as a general and 'continuous increase' in the prices of goods and services in an economy over time. it results in the decrease of the purchasing power of money. While a one-time price rise is a shock, inflation refers to an ongoing trend of rising costs. Managing this rate is a primary goal of the Reserve Bank of India to maintain economic stability.